Report: 40+ Percent of World's Software is Pirated

According to a new study, more than 40 per cent of the world's software is pirated. The study also claims the software industry lost $53 billion to pirates last year, though that figure has a major flaw in its calculation.

According to the Business Software Alliance (BSA), the United States has the world's lowest piracy rate, with just 20% of software being unlicensed. However, the size of its software market means the losses have the biggest financial value, totaling $9.8 million last year.

Across the world, the study found that while piracy dropped in the majority of countries, the worldwide piracy rate actually rose from 38% in 2007 to 41% last year. That's mainly because of the large growth in computer sales in China which has a traditionally huge piracy rate.

China And Russia Piracy Rates Slowly Dropping

That said, China's piracy rate did drop during the year, from 90% to 80%, largely thanks to a government decision to insist that all computers used by officials ran legitimate software. Russia also had a notable drop, falling from 73% to 68%.

However, there are seven other countries where at least nine out of ten pieces of software are pirated: Armenia, Azerbaijan, Bangladesh, Georgia, Moldova, Sri Lanka and Zimbabwe.

Affect of Economic Slowdown on Piracy

While most expect that the worldwide economic slowdown would increase piracy, the study suggests that is not the case. The BSA believes many buyers are turning to low-priced netbooks, which usually come with sufficient legitimate software already installed.

The study also argues that piracy can lead to job cuts for software retailers and support firms; that it increases the dangers of viruses spreading; and that it lowers tax revenues for governments. (Source: bsa.org)

Study Receives Criticism

The BSA has earned harsh criticism in previous years for methods used for this annual study.

The Economist newspaper says the study utilizes an overly simplistic method of estimating the amount of software used in a country, then subtracts known legitimate sales. (Source: corante.com)

The other significant problem with the figures are that the dollar amounts for piracy losses are calculated on the basis of how much legitimate copies of those programs would cost to buy. The problem with this approach is the assumption that everyone who uses pirated software would otherwise have paid the full retail price.

In reality (and in particular with highly priced programs), there are many people who would never have bought the products and, without pirated versions, would either do without the relevant tools altogether or get by with open source and/or shareware alternatives.