BSA Study: Properly Licensed Software Delivers Four Times the Economic Benefit of Pirated Software

^[1]A new study from BSA | The Software Alliance ^[2] and INSEAD ^[3], one of the world’s leading business schools, finds that increasing the use of properly licensed software would have a greater impact on the economy in Canada than allowing similar growth in the use of pirated software. A one per cent increase in use of licensed software would generate an estimated $2.25 billion, in national production, compared to $521 million from a similar increase in pirated software — meaning properly licensed software would deliver $1.73 billion in additional economic value.

Competitive Advantage: The Economic Impact of Properly Licensed Software ^[4] is a groundbreaking analysis that draws on data from 95 countries to demonstrate the benefits to national economies of using fully licensed software. The study confirms that increasing use of licensed software corresponds to substantial positive gains in gross domestic product (GDP), and that the economic stimulus effect of properly licensed software is significantly greater than that of pirated software.

“Using properly licensed software reduces risk and creates operating efficiencies that go directly to the bottom line for enterprises,” said Jodie Kelley, Vice-President of Anti-Piracy & General Counsel. “This study confirms that licensed software is not just good for firms — it is an important driver of national economic growth. Government, law enforcement, and industry in Canada should take every opportunity to reap these potential gains by reducing piracy and promoting use of properly licensed software.”

The study also finds that each additional dollar invested in properly licensed software has an estimated return on investment (ROI) of $73. This compares to a $46 return from each additional dollar worth of pirated software put into use.

Among the study’s other findings:

• Increasing licensed software use globally by one per cent would inject an estimated $73 billion into the world economy, compared to $20 billion from pirated software — a difference of $53 billion.
• Every country included in the study saw greater economic returns from properly licensed software than from pirated software.
• On a dollar-for-dollar basis, the return on investment from using properly licensed software is greatest in developing countries — $437 in extra GDP, on average. Still, countries across all income levels benefit: each additional dollar invested in licensed software has an average ROI of $117 in high-income countries and $140 in middle-income countries.

“Previous studies have shown that value-added services delivered with properly licensed software help firms to reduce costs and increase their productivity. This report goes one step further to ascertain the impact of software use on national production,” said Eduardo Rodriguez-Montemayor, senior research fellow at INSEAD eLab. “The results make it clear that licensed software is beneficial for business and national economies — and that licensed software has a greater economic impact than pirated software across all countries included in the study.”

Governments and enterprises wanting to embrace the economic opportunity presented by licensed software use should take action in the following areas:

• Establish strong and modern intellectual property laws that protect software and other copyrighted materials on PCs, mobile devices, and in the cloud.
• Step up enforcement of intellectual property rights with dedicated resources.
• Raise public awareness about the risks of software piracy.
• Lead by example by using only fully licensed software and implementing software asset management programs.

A full copy of the study: Competitive Advantage: The Economic Impact of Properly Licensed Software is available for download on BSA’s website: www.bsa.org/softwarevalue ^[4].