Reducing Australian software piracy from 27 percent of all software used to 17 percent could create 7,000 more jobs and boost local industry revenues by AU$5 billion over the four years till 2006, a new study claims.

The Business Software Association (BSA) commissioned analyst IDC to conduct the worldwide study "Expanding Global Economies: The benefits of reducing software piracy". The report found that reducing software piracy by 10 percent points by 2006 would boost the local IT sector in dollar terms by 53 percent to nearly AU$35 billion and increase tax revenue by AU$728 million per year.

It would also add AU$6.8 billion to Australia's GDP. Chris Fell, managing director of IDC Australia, said the analyst took into account the increased cost to business of using licensed software, and the lowered maintenance costs that accrue from using licensed software, but could not quantify the figures.

The BSA provided IDC with figures on the level of software piracy, and claims the results show that countries with lower levels of piracy have faster growing software industries, a result which vindicates its activities.

Fell explained that IDC combined the impact of the IT industry on the Australian economy with the estimated piracy rate, and used that to calculate the effect of the IT industry based on a different piracy level.

The study made the assumption that there is a linear relationship between lower software piracy and software revenue growth. Even though preventing a company using an illegal version of a program would see some companies stop using the software altogether, and others substitute with other pirated software, some would pay to use the software. This would in turn stimulate more activity which will pay for more software and development, argued Fell.

The second basic assumption was that services and channel firms receive benefit from lower software piracy. "It's not one-to-one because they may already be getting some economic gain from software being used without authorisation," said Fell.

The creation of 7,000 jobs are expected to be at the "high-end" level, and is based on the assumption that as a company's revenue increases, it will hire more staff.

The study did not include indirect economic benefits or the effects of piracy outside a country that affects exporters.

Across the Asia Pacific the report claims a 10 percentage point reduction in software piracy would create 1.1 million new jobs, US$170 billion in additional economic growth and more than US$15 billion in additional tax revenue.

Australia's software piracy rate reportedly dropped from 32 percent to 27 percent between 1996 and 2002. Over the same time frame, the software industry grew its share of the overall IT sector, which expanded at 12.4 percent per year.

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