The IT sector is an important part of Asia Pacific economies but its growth potential is compromised by software piracy. Cutting the region's average software piracy rate by 10 percentage points to 43 per cent over a four-year period could add an additional $135 billion to its economies, increase local industry revenues by more than $106 billion and generate an additional two million jobs - more than every other region in the world combined - according to a new study released by the Business Software Alliance (BSA) today.

The independent study, conducted by International Data Corporation (IDC), also found that for governments in the Asia Pacific region, the cumulative effect of this growth could mean an additional $14 billion in new tax revenues.

"Growth in the Asia Pacific's IT sector has already translated into significant benefits for the region's economies, said Jeffrey Hardee, vice president and regional director, Asia, BSA, while launching the study in Singapore. "It is a $195-billion industry that employs 4.7 million workers and contributes $120 billion in taxes each year, but the region could do better. With a 10-point drop in the region's average software piracy rate, the software sector could grow three times faster over the next four years than it did in the last four years and spur expansion of the IT sector. Software is the driving force behind growth in the IT sector, which also includes hardware and IT services. When countries take steps to reduce software piracy, just about everyone stands to benefit," added Hardee.

In terms of benefits, Hardy says, "Workers have more job opportunities, consumers have more choices, innovators have more financial incentives, entrepreneurs have more software-related business opportunities, and governments benefit from increased tax revenues."

In India, the study found that a 10-point reduction in the current 74 per cent piracy rate would have a tremendous impact on the domestic front, enabling the IT sector (excluding software and services exports) to grow from $7.4 billion to $19.5 billion.

" India, which is projected to see the second fastest IT growth in the global survey - could also nearly triple the size of its IT sector by 2009. A reduction in the software piracy by 10-points over four years can have a significant impact on India's economy. On top of an already impressive growth rate, it will add 115,000 jobs, contribute $5.9 billion to GDP, add $386 million in taxes and $8.2 billion in revenues to local vendors, " added Hardee.

The BSA-IDC study found that the global IT sector, currently projected to grow by 33 per cent between 2004 and 2009, could instead grow by 45 per cent over the same period with a 10-point reduction in software piracy.

The study also concluded that four out of five countries would see greater than 30 per cent IT sector growth with a piracy reduction. Countries with the highest piracy rates stand to gain the most through piracy reductions, Vietnam, China and Indonesia, which top piracy rates in the region, would be the largest beneficiaries of piracy reductions.

For example, China could potentially gain more than any other country in the world, tripling its already large IT sector. With a 10-point piracy reduction, China could create 2.6 million new IT jobs in four years - as many IT jobs as the United States has created in 30 years.

The BSA-commissioned study, assesses the IT sector's economic impact in 70 countries worldwide and the benefits that accrue to countries that tighten and enforce their intellectual property (IP) laws and work to educate the public about the impact of piracy.

Using its market data on IT industry spending, employment, and IT-generated revenues, IDC conducted an analysis in each of the 70 countries to determine what the impact of lowering piracy would be on spending on packaged software and how that would impact spending on related services and distribution.

"With this report, we are able to further quantify the positive benefits that countries across the world, including those in the Asia Pacific region, can experience as a result of stronger IP protection and greater education and awareness," said Marcel Warmerdam, research director, IDC IT Markets.

With 1.1 million businesses worldwide, the IT industry contributes nearly $1.7 trillion a year to global economic prosperity. Globally, a 10-point reduction in software piracy could generate $67 billion in new tax revenues worldwide, which, according to the Organisation for Economic Cooperation and Development figures, 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.

• Updating national copyright laws to implement World Intellectual Property Organisation (WIPO) obligations;
• Creating strong enforcement mechanisms, as required by WTO, including tough anti-piracy laws;
• Dedicating real government resources to the problem, including national IP enforcement units, cross-border cooperation, and more training for local officers;
• Improving public education and awareness; and
• Leading by example by requiring public sector to use only legitimate software.