Reducing piracy 10 points in Puerto Rico could add millions to its economy, create more new jobs, and significantly increase tax revenue
San Juan, Puerto Rico (December 8, 2005) – Cutting Puerto Rico’s piracy rate of 46 percent by 10 percentage points over a four year period could spearhead a 50 percent growth in the Island’s IT industry, giving way to a 14,000 job sector, contributing more than $1 billion to Puerto Rico’s Gross Domestic Product (GDP), and generating $ 622 million in tax revenue by the year 2009, according to a new International Data Corporation (IDC) study released by the Business Software Alliance (BSA) today.
According to IDC, Puerto Rico’s IT sector experienced robust growth between 2000 and 2004, obtaining the second highest growth rate in the Latin America region. This expansion resulted both from a 46 percent increase in the local demand for software, and from an increment in the IT-related services segment. The data revealed that if the Island reduced its piracy to 36 percent in the next four years, by 2009 this industry growth could double, increasing at a much faster rate than the average rate of 33 percent currently projected at a global industry level.
“The reduction in Puerto Rico´s software piracy rate over the last decade is paying off, giving way to a fast-growing IT sector that is generating strong economic activity and good jobs. However, Puerto Rico’s piracy rate is still double that of the US piracy rate and significantly higher than many of its top global competitors, such as Ireland and Singapore, where a commitment to upholding intellectual property rights has resulted in a remarkably solid IT industry”, said Michael Yong, Puerto Rico Program Manager for the BSA.
BSA estimates Ireland’s software piracy rate at 34 percent, while in Singapore it is 42 percent. In both countries, the IT industry’s contribution to the GDP by far exceeds that of Puerto Rico, were the sector represents only about 1 percent of the GDP. In the case of Singapore, IT accounts for 3.5 percent of the country’s GDP, representing the highest IT share of total GDP in the world.
The BSA-commissioned study, available online at http://www.bsa.org/idcstudy, is the only study of its kind, assessing the IT sector’s economic impact in 70 countries worldwide and the benefits that accrue to countries that tighten and enforce their intellectual property laws and work to educate the public about the impact of piracy.
The study also found that a reduction of 10 points of the 35 percent global software piracy rate would add 2.4 million new jobs, $400 billion in economic growth and $67 billion in tax revenues worldwide. Every one percentage point drop in software piracy could yield $40 billion in economic benefits by jumpstarting growth in the global information technology (IT) sector. With 1.1 million businesses worldwide, the IT industry contributes nearly $1.7 trillion a year to global economic prosperity. The study also concluded that while the global IT sector is currently projected to grow 33 percent through 2009, a 10-point reduction in software piracy could spur the global IT industry to grow 45 percent larger by 2009.
“When countries take steps to reduce software piracy, just about everyone stands to benefit,” said
Robert Holleyman, BSA president and CEO. “Workers have new jobs, consumers have more choices, entrepreneurs are free to market their creativity, and governments benefit from increased tax revenues.”
Globally, a 10-point reduction in software piracy could generate $67 billion in new tax revenues worldwide. Based on Organization for Economic Cooperation and Development figures, this new revenue could provide:
• 435 million people with job training benefits
• Health care services for 45 million people
• Computers for over 33 million school children; or
• College degrees for 6.6 million people.
In addition to outlining the economic benefits that can be realized through increased copyright protection, the study also suggests that countries that want to enjoy the economic benefits promised in this study can do so by taking the following five steps:
• Update national copyright laws to implement World Intellectual Property Organization (WIPO) obligations;
• Create strong enforcement mechanisms, as required by World Trade Organization, including tough anti-piracy laws;
• Dedicate real government resources to the problem, including national IP enforcement units, cross-border cooperation, and more training for local officers;
• Improve public education and awareness; and
• Lead by example by requiring public sector to use only legitimate software.
“With this report, we are able to further quantify the positive benefits that countries across the world can experience as a result of stronger intellectual property protection and greater education and awareness,” said John Gantz, Chief Research Officer at IDC. “It provides a comprehensive snapshot of what we have known all along: reducing software piracy delivers real results in the form of more funding for education, job training, health care, and overall economic growth.”
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About BSA
The Business Software Alliance (www.bsa.org) 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, Cadence Design Systems, Cisco Systems, CNC Software/Mastercam, Dell, Entrust, HP, IBM, Intel, Internet Security Systems, Macromedia, McAfee, Microsoft, PTC, RSA Security, SAP, SolidWorks, Sybase, Symantec, Synopsys, The MathWorks, and UGS.
About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology and telecommunications industries. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 775 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 40 years, IDC has provided strategic insights to help our clients achieve their key business objectives.
Contact Information:
Romy Toledo
toledor@fleishman.com
Fleishman-Hillard Puerto Rico
787-620-1400
