Pirates of the Arabian

Sometimes there’s a flip side to India’s being an IT leader of the world. The United States’ Business Software Alliance reports that Indians are one of the bigger software pirates in the world. In 2009, BSA reports that about $2 billion worth of software was illegally installed on Indian PCs, though that’s a measly 7th place in the world (The USA at $8.3 billion and China at $7.5 billion lead the pack). But we are the fourth-largest growth economy in pirated software, adding $1.4 billion worth of illegal software to our PCs and laptops over 2005-2009. The total legal software installed in India was only 35% in 2009. In other words, two out of every three PCs are running on illegal software. If it’s a consolation, Pakistan (16%) and China (21%) do worse than us.

Worldwide, $50 billion was ‘stolen’, and the growth rate clocked in at 43% last year.

What might it imply for India? These are just a blogger’s thoughts, so do add your own reactions and analysis to this.

Almost all original software is developed abroad. Despite a vibrant, economy-driving IT industry, few original software packages ever come from India. Forget an operating system, we don’t even have an word processor that we have developed and deployed ourselves commercially. A strong deterrent to buying and installing legitimate software is the price; any packages are indeed very expensive. But that’s a matter of economics – the price of software would/could fall were legal demand to rise. It happens with electronic items anyway, which are hard to pirate (or smuggle). The more we buy, the cheaper they become.

The Business Software Alliance report also predicts that rates of piracy have some years to go before they peak. Which means that Western software developers will see more leakages, and they will wonder how economic it is to stay in the business. Would it make sense for them to sell in markets like Asia and Africa where piracy is high? Would they restrict themselves to Europe and USA, where they have some guarantee of anti-piracy laws being implemented?

Another implication is the prospect of a ‘software war’. India’s reputation as an IT depends substantially on Western companies outsourcing work to India. That creates and sustains demand for software, and western manufacturers see a big demand they hope to fulfill. If the demand is filled by pirated software instead, it creates the sense that India sells IT to the West and steals software. In other words, a trade imbalance that cannot be justified by. The BSA is already a lobby group, and it is certainly going to lobby Western governments to

a) Put diplomatic pressure on Asian & African countries to act more decisively on anti-piracy laws and their implementation
b) Apply trade sanctions to try and level the playing-field

As the report seems to portend, we have dangerous times ahead. You can read a summary of the study here, or download the full study here.

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About ozymandias

What am I? A body and brain, products of carbon concatenation chemistry, an intelligence and conscience to enable bits of DNA evolve. Maybe a pharaoh, maybe a dung-beetle, never more than a safe conduit for some genes.
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