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Statistical Impact of Software Piracy on Singapore
Most customers are largely unaware of the gravity of the risks involved in downloading/purchasing pirated software. Even a majority of those who are aware, do not fully realize the problems caused by pirated software in terms of PC performance, viruses, etc. This only goes to show the need to increase awareness campaigns targeted at all classes of society in order to help them gain a broad understanding of the adverse effects of pirated software.
Figure 1.1 [4]
In Figure 1.1 from the BSA 2006 report on software piracy, Singapore is one of the 20 countries that have the lowest piracy rate. Even so, in Singapore alone, the total loss incurred by the software companies amount up to $96 million US Dollars, and in the world, a whopping sum of $32,695 Million US Dollars. [4]
From the above extract, the major impacts of software piracy are the effects it has on the economy and the social welfare of the consumers and programmers. The loss in revenues by the software companies will decrease incentives for the programmers to create and develop more creative and innovative software that are more beneficial to the customers. Besides that, the total loss of revenues in Singapore is $96 million US dollars, which in turn, could amount up to thousands of jobs for the population.
According to Ministry of Manpower (Singapore MOM), by the month of September 2006, Singapore has an unemployment rate of more than 3.2%. [7] Singapore has only a piracy rate of 42% in 2005 (The percentage of software used in commercial and private sectors are pirated). However, if Singapore was able to decrease its piracy rate to 32%, it would add $770 million to its economy, create 3,700 more new jobs, and increase local industry revenues by another $573 million. This new vibrancy would, in turn, generate an additional $150 million in tax revenue to help Singapore 's government pay for vital public services. [11] Thus, a reduction in software piracy would lead to an increase in employment rates, high economy growth and more social benefits to the consumers as well as the developers.
Figure 1.2[11] Click on image to view it in its original size
Figure 1.2 projects the growth of Singapore Economy if piracy rate is being reduced. According to the research by BSA and IDC on Global Piracy Study, a thriving IT workforce has helped Singapore's IT sector grow to $3.7 billion a year. If the country further reduces its 42-percent piracy rate by 10 points, its IT industry could grow to more than $4.6 billion a year by 2009 . [5] In addition to that, a 10% drop in piracy worldwide will create 2 million jobs and $135 Billion US dollars in economic growth globally. This increase in tax revenues could be further pass on to the public.
In conclusion, software piracy has an adverse effect on the global economy indeed. A reduction in the software piracy rate will benefit consumers and workers. Please refer to the appendix for more information on the benefits of reducing software piracy.
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