Software piracy costs the world $11.4 billion

Of 574 million new business software applications installed globally during 1997, 40 per cent were pirated, two million more than in 1996.

According to a new report commissioned by the Business Software Alliance and Software Publishers Association (SPA), the figures "illustrate that fighting piracy needs to be elevated to a higher priority".

"These losses have serious negative implications well beyond the industry, stealing jobs and hurting customers," commented Robert Holleyman, president & CEO of the Business Software Alliance.

Ken Wasch, president of the SPA, added: "Software piracy continues unabated, and even more sobering is the realisation that piracy of educational and entertainment software costs uncounted billions more. We call on governments around the world to ratify the WIPO Copyright Treaty, which would provide much needed remedies against software piracy tools, and to rededicate themselves to fighting piracy by and through enforcement and education."

The SPA estimates the cost of piracy to the software industry at $11.4 billion and 84 per cent of that loss was incurred by companies in north America, Asia and western Europe. In descending order, the top 10 countries with the highest dollar losses due to software piracy are the US, China, Japan, Korea, Germany, France, Brazil, Italy, Canada and the UK. Losses for these countries amounted to $7.8 billion, or 68 per cent of the worldwide figure.

Asia continues to be the biggest loser, $3.9 billion in 1997, up from $3.7 billion in 1996, and the SPA attributes this to a three per cent increase in the number of new software installations, coupled with the piracy of more sophisticated and costly applications.

The countries with the highest rates were Vietnam (98 per cent), China (96 per cent) and Indonesia (93 per cent). Countries with the highest dollar losses were China ($1.4 billion), Japan ($752 million) and Korea ($582 million).

Within Europe, the eastern countries have the highest piracy rate although the $561 million loss for the continent is relatively low compared to other areas. However, almost 80 per cent of applications were pirated across eastern Europe in 1997, and the highest rates were in Bulgaria (93 per cent), the CIS minus Russia (92 per cent), and Russia (89 per cent). Countries with the highest dollar losses in eastern Europe were Russia ($251 million), Poland ($107 million) and the Czech Republic ($51 million).

In western Europe the largest dollar losses to software piracy occurred in Germany ($509 million), France ($408 million) and the UK ($335 million). The highest piracy rates were in Greece (73 per cent), Ireland (65 per cent) and Spain (59 per cent). On average, piracy rates in western Europe declined by four points to 39 per cent.

At 65 per cent, the Middle East and Africa had the second highest regional piracy rate in the world, even after a nine per cent decline from 1996. South Africa, Turkey and Israel represent some 49 per cent of the monetary losses.

North America, which represents 43 per cent of business software usage worldwide, lost $3.1 billion, 27 per cent of worldwide losses, and the US alone accounted for $2.7 billion, up from $2.3 billion in 1996.