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New Study Makes a Compelling Economic Case
22-01-2008 IT/BSA source: PeppeR
"Knock-on" Benefits of Reducing Software Piracy Translate into Jobs, Economic Output and a Stronger IT Sector Reducing software piracy over the next four years in Hungary could create a stronger local information technology (IT) sector, generate about 1.100 new high paying jobs, and contribute 47 billion HUF (274 million $) to Hungary's economy, according to a new study released today by the Business Software Alliance (BSA). This new study is based on a model, which focuses on the benefits of reducing PC software developed and produced by BSA member firms.

The study, commissioned by BSA and conducted independently by International Data Corporation (IDC), notes that the IT industry already is a major contributor to jobs, tax revenues and Hungary's gross domestic product (GDP). Estimates claim that in 2007 2,3% of the GDP derived from the IT sector, it supported more than 6.200 IT companies with more than 45.000 IT industry employees and helped generate 277 billion HUF (1.6 billion $) in contributions and taxes.

Reducing Hungary's 42% software piracy rate, merely in the case of software produced by BSA members for PCs, by 10 percentage points - during 4 years would have a "multiplier effect" and increase economic benefits significantly. The 10% reduction would help generate 1.094 additional jobs, 47 billion HUF in the performance of the Hungarian economy as well as add 11 billion HUF (63 million $) in tax revenues.

"When countries take steps to reduce software piracy, everyone stands to benefit," said Gábor Sarlós, BSA spokesperson in Hungary. "With more and better job opportunities, a stronger, more secure business environment, and greater economic contributions from the already robust IT sector; reducing software piracy delivers tangible benefits for governments and local economies. The current study has been conducted by IDC regarding PC software developed, manufactured and sold by BSA member companies. Taking into account that in our estimate these products account for about 40% of the total performance of the software industry, it is easy to acknowledge that a 10% decrease across all the products of all the manufacturers would benefit the economy even considerably more."

IDC finds that for every 1 Forint spent on legitimate packaged software, an additional 1.25 Forint is spent on related services such as installing the software, training personnel, and providing maintenance services. Most of these benefits accrue to locally-based software services and channel firms - meaning the greatest proportion of the economic benefits from lowering software piracy stay within the country. IDC research released by BSA in May 2007 estimates that 42% of PC software installed on personal computers (PC) in Hungary in 2006 was unlicensed. BSA spends much of its efforts building awareness among small & medium-sized enterprises (SMEs) about the risks and legal consequences of using unlicensed PC software.

"Reducing PC software piracy is important for business owners and SMEs in order to reduce the legal and business risks of using unlicensed software," said John Gantz, Chief Research Officer at IDC. "But software is unique in its ability to drive value throughout other sectors. Thus, policy makers should find a compelling case for taking steps to reduce software piracy in order to reap the economic benefits of a strong national software and IT sector. It's clear that reducing software piracy delivers real results that help real people with real challenges."

BSA encourages governments that want to enjoy the economic benefits of reducing software piracy to take the following steps:

1. After the update of national copyright laws to implement World Intellectual Property Organization (WIPO) obligations;

2. Following the creation of strong enforcement mechanisms, as required by the World Trade Organization (WTO), including tough anti-piracy laws;

3. Dedicate significant government resources to the problem, including national IP enforcement units, cross-border cooperation, and more training for local officers;

4. Improve public education and awareness; and

5. Lead by example by requiring the public sector to use only legitimate software.

The new BSA-IDC study is available online at and examines the bottom-line economic benefits of reducing PC software piracy in 42 countries. The cornerstone of the research is IDC's Piracy Impact Model (PIM), which takes inputs from IDC's market research around the globe on IT spending and software piracy, along with other information on IT employment levels and IT-related taxes.

About BSA

The Business Software Alliance ( is the foremost organization dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry and its hardware partners before governments and in the international marketplace. Its members represent one of the fastest growing industries in the world. BSA programs foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce. BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, McAfee, Microsoft, Monotype Imaging, PTC, SolidWorks, Sybase, Symantec, Tekla, The MathWorks, and UGS. Hungarian members are Adobe, Autodesk, Graphisoft, Microsoft and Symantec, as well as Apple, Avid, Bentley Systems, Monotype, Tekla and UGS.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting

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