There is a direct link between high levels of software piracy and poor economic growth. The higher the rate of piracy, the more likely a country’s economy will stagnate.

That’s the view of Leon Louw, executive director of the Free Market Foundation, who was speaking at a software piracy convention hosted by the foundation and the Information Technology Association on Thursday.

Experience shows high rates of software piracy coincide with economic stagnation, especially in the IT industry, Louw says.

“Countries with high rates of software piracy tend to be economically backward and characterised by corruption and poor governance,” he says. “Conversely, prosperity increases as piracy falls and the rule of law is upheld.”

Louw cites research from the International Data Corp (IDC) that shows SA faring relatively well in reducing piracy levels. Piracy rates in the country are estimated at 35% — in other words, for every three software applications installed, one was pirated and two were legitimate. In the US, the figure is 20%; in Armenia, on the other end of the scale, it’s 93%.

In addition, Louw cites Business Software Alliance research that claims that a 10 percentage point reduction in piracy rates over four years should create 1 650 hi-tech jobs in SA. According to research by the alliance, R9bn in new economic activity and R1bn in new tax would flow from such a reduction. And IDC research shows a direct correlation between economic growth and a reduction in piracy. The faster piracy rates come down, the quicker an economy grows.

“Such correlations do not, of course, imply a direct causal link in either direction, but the overwhelming coincidence worldwide between such factors as lower piracy, corruption, poverty and unemployment rates, on one hand, and enhanced performance in virtually all areas for which there are published indices, on the other, is strong evidence for what a government should do if it wants its country to be a winning nation,” Louw says.

Representatives of Microsoft, the Computer Society of SA, The Business Software Alliance and the department of trade and industry were also scheduled to speak at Thursday’s event. — Staff reporter, TechCentral