Less software piracy may aid industry

A 10-percent reduction in the software piracy rate could almost double revenues in the local technology sector by 2006, a research company reported yesterday.

Fifty-three percent of all software disks sold in Taiwan are illegal copies, but if that figure is reduced to 43 percent, the information-technology sector could increase revenue from US$5 billion last year to US$8.1 billion by 2006, according to International Data Corp (IDC).

In addition, US$1.4 billion could be added to the nation's gross domestic product, local vendors could benefit by US$1.1 billion in extra sales, and between 4,000 and 5,000 new high-tech jobs could be created, the IDC report said.

"This report reveals not only how significant the software sector has been for Taiwan's economic growth, but also how it could be an engine for powering our transition to a knowledge-based economy, where innovation and ideas can flourish," Sung Hong-ti (宋紅媞) chairperson of the Taiwan branch of the Business Software Alliance said yesterday. The alliance includes Microsoft Corp and Norton Antivirus developer Symantec Corp.

IDC formulated its predictions by looking at how much the local industry loses because of pirated software, then cuts the piracy rate by 10 percent and computes the difference. The research firm released its global figures at the beginning of April, estimating that a 10-percent reduction in piracy worldwide could lead to the creation of 1.5 million jobs, increase economic growth by US$400 billion and generate US$64 billion in tax revenue.

The report had some good news for the Taiwan government.

"For Taiwan's government, a 10-point drop could translate into an additional US$87 million in tax revenues," said Terry Tsao (曹志堅), general manager of IDC's Taiwan branch.

Citing the government as an example for the public, Taiwan's No.2 man in charge of intellectual property said that it is important for people to change their attitude towards pirated software.

"The government spent NT$4.8 billion on legal software in 2001, an increase of 65 percent on the previous year," said Jack Lu (盧文祥), deputy director general of the Ministry of Economic Affairs' Intellectual Property Office. "The government plans to increase that even further this year."

One skeptic said that statistics could be deceptive.

"Jobs will increase, but how many jobs will be lost?" said Paul Liu (劉江彬), director of National Chengchi University's Graduate Institute of Intellectual Property. "How much is it going to cost the government to reduce the rate of piracy? We have to think of the net increase in revenue."

Tackling piracy would help to attract more foreign investment, Liu said.

"If we can reduce piracy it will benefit Taiwan, because when foreign companies appraise a country for investment they prioritize whether their intellectual property will be protected," he said.

In an effort to reduce piracy in Taiwan, the government has proposed a change to the Copyright Law (著作權法) that will allow police to initiate busts.