SOFTWARE piracy can be defined as illegal copying and distribution of software for commercial and personal gains. Software piracy is the bane of the IT industry throughout the world. Despite frantic efforts by software companies and governments, it remains an unresolved problem causing colossal damage in terms of billions of dollars in lost revenues, taxes and unemployment. This scourge has not only inflicted culinary damage upon software business, but has also caused immediate and long-term setbacks to software development. Widespread piracy can be judged by the fact that more than one out of every three software applications installed in the world is pirated. This puts the global piracy rate to a stunning 36 per cent.
GLOBAL TREND: In early 2002, the International Planning and Research Corporation (IPR) completed an analysis of software piracy for the year 2001. This study was carried out at the behest of Business Software Alliance (BSA) and its member companies. The purpose of this study was to analyse the gravity of the problem and its peculiar trends, so as to devise some strategy to fight this evil. In this study, software piracy was measured as the amount of business; application software installed without a license. The result of this study was disconcerting for the stakeholders of legitimate software industry. It not only presented a bleak picture of the ongoing situation, but heralded the devastating prospects if such magnitude of piracy was to continue in future.
An analysis of the trends indicates a constant decline in piracy for four consecutive years. But then, there is a rapid increase in the next two consecutive years, showing the decline to be a temporary phenomenon. These inferences lead to the dismaying fact that compliance with software licensing is at risk of being considered an economic luxury that can be abandoned at any time. Another noteworthy point is the fact that only the developing countries are showing such rampant piracy rates, in contrast to a consistent residual rate in developed countries.
PIRACY AND PAKISTAN: A study of the global situation in software piracy reveals that Asia/Pacific is the highest infected region of the world, with China leading at 92pc and Pakistan not far behind at 83pc, as per the statistics available in 2001.
The spread of software piracy in Pakistan is a direct consequence of our economic conditions as well as a general lack of regard for intellectual property rights and the absence of a potent deterrent in the form of copyright laws. An average software buyer here cannot afford to pay the exorbitant priced branded software. Pirated softwares are available everywhere at throwaway rates, often as low as 5pc of the original branded rates. Hence, black-marketing of software is a thriving business at the cost of the software industry and the national economy. The audacity of software pirates has increased by the lack of firm copyright laws in the country. Some awareness has surfaced and the government is striving to make some laws compatible to prosecute software piracy. Will these laws ever be enforced in letter and spirit?
Virtually all the software applications used for personal computers in the country are pirated. The only exceptions are a few big firms and companies who cannot run the risk of being litigated at the hands of oraganizations such as the BSA for using unlicensed software.
The implications of software piracy are very far-reaching for the country’s interest both at home and abroad. Some major setbacks caused to Pakistan by this phenomenon are loss of revenues, stagnation in software development, self-reliance in software industry, unemployment and damage to national image and exports.
LOSS OF REVENUES: The amount of money lost to piracy amounts to millions of dollars. Although the loss borne by Pakistan is not comparable to that inflicted upon bigger and more developed countries, yet given the size of our economy even this loss is comparatively painful. The government of Pakistan is the direct victim of this loss, which loses most of what is payable in software import duties and taxes on local firms.
Given the immense room for growth of the software industry and the ever-increasing demand for software applications in the country, this revenue loss is sure to increase manifold in the coming years.
STAGNATION: By and large, the most far-reaching consequence of software piracy is its impact on the local software industry. The glut of pirated software renders the local development of software virtually meaningless. Since most of the pirated software is available at throwaway prices, the majority of software users do not bother to pay any heed to immediate or far-reaching disadvantages of buying and using such software. The consequences: no one ventures to develop software locally. As a result, any hopes of a thriving indigenous software industry remains an unfulfilled dream. In contrast to our stagnant software industry, India is progressing by leaps and bounds in the field of software development.
SELF-RELIANCE: The key to economic prosperity lies in indigenous development and self-reliance. All the sections of industry and production contribute to the prosperity of a nation. Hence, the software industry is no exception. The question arises if we will ever be able to achieve self-reliance in the field of software and IT? Chances of this are very remote if not altogether absent, as long as the curse of pirated software plagues our industry or enough incentives are not available for our local software developers. We will always remain dependent upon foreign softwares and our much-needed progress will remain a hostage to the interests of the black market.
UNEMPLOYMENT: The global boom in information technology sent some tremors through Pakistan also. Unprecedented opportunities were anticipated for the youth in this field. Scores of IT institutes were established both in private as well as official sectors. These universities and institutes are churning out a large number of IT graduates. Though a good omen, the phenomenon is not without a darker side. The flooding of pirated software and the eventual setback to the local software industry has created a despairing situation. With a lack of or meagre hiring by local software industry, the majority of IT graduates are left unemployed. This is not helping the already bleak state of employment.
NATIONAL IMAGE AND EXPORTS: With growing international disapproval of unlicensed software, many of our companies may run the risk of litigation at the hands organizations such as the BSA. This will be an unbearable loss to our national exports and ultimately to our state exchequer.
CORPORATE SECTOR: The foremost good caused to the corporate sector by licensed software will be the re-funnelling of millions of dollars annually in lost revenues. The pleasant impact of this market prosperity on the economy of the country is beyond doubt.
