The Canadian Alliance Against Software Theft
(CAAST) and the Business Software Alliance (BSA) announced the findings
of a global software piracy study that reveals Canada’s software piracy rate
decreased three percentage points from 36 per cent to 33 per cent in 2005
falling below the worldwide piracy rate which remained stable at 35 per cent.
Losses to the Canadian economy due to software piracy were CDN $943 million,
down CDN $166 million from 2004. Canada is also among the top 20 countries
with the lowest software piracy rates worldwide.

The independent study, conducted by global market research and
forecasting firm IDC and released by CAAST and BSA, shows some improvements in
a number of markets that indicate anti-piracy education, enforcement and
policy efforts are beginning to pay off in emerging economies such as China,
Russia and India and in Central/Eastern Europe and the Middle East & Africa.
However, losses from software piracy worldwide amounted to CDN $41 billion in
2005, an increase of CDN $752 million over the previous year.
“It’s encouraging to see progress being made in reducing Canada’s
software piracy rate and how it is approaching the rates found in countries
such as the U.K., Germany and Australia,” said Jacquie Famulak, president of
CAAST. “However, more than one out of every three copies of PC software put
into use in Canada in 2005 was still obtained illegally. This continues to
have an impact on our economy and local software vendors, suppliers and
channel partners in the wholesale-to-retail distribution chain are among the
most deeply affected. This year’s study shows that software piracy can indeed
be lowered, but also that more work needs to be done.”

Piracy rates decreased moderately in more than half (51) of the
97 countries included in this year’s study, and increased in only 19. The
global rate was unchanged from 2004 to 2005 as large developed markets like
the United States, Western Europe, Japan and a handful of Asian countries
continue to dominate the software market while their combined piracy rate
hardly moved. Some positive changes were seen in rapidly developing countries
such as Russia, which saw a four point drop in its PC software piracy rate
while India’s piracy rate declined two points. China, with one of the fastest
growing IT markets in the world, dropped four points between 2004 and 2005.

Other key findings from the study include:

– The four countries with the largest percentage point drop in their
piracy rate during the past year were China (4 points), Russia
(4 points), Ukraine (6 points) and Morocco (4 points).
– Software piracy rates in 19 of 26 countries in the Middle East and
Africa declined, with 12 countries dropping two or more percentage
– In Central/Eastern Europe, the piracy rate declined in 15 of the
18 countries included in this year’s study.
– The countries with the highest piracy rates were Vietnam (90 percent),
Zimbabwe (90 percent), Indonesia (87 percent), China (86 percent) and
Pakistan (86 percent).
– The countries with the lowest piracy rates were the United States
(21 percent), New Zealand (23 percent), Austria (26 percent) and
Finland (26 percent).

In countries with very large software markets, comparatively low piracy
rates can amount to huge losses. While the United States had the lowest piracy
rate of all countries studied at 21 percent, it also had the greatest
individual losses – CDN $8.3 billion. China saw the second highest losses at
CDN $4.7 billion with a piracy rate of 86 percent, followed by France with
losses of CDN $3.8 billion and a piracy rate of 47 percent.
“Many factors contribute to regional differences in piracy – the strength
of intellectual property protection, the availability of pirated software,
cultural differences and IT-related market trends,” said John Gantz, chief
research officer at IDC. “Canada’s lowered piracy rate, as with other
countries, can be attributed to high PC market growth, continued enforcement
and a major increase in branded laptops replacing desktops made by local
“Stronger intellectual property protection and education and awareness
are absolutely critical to stem the growth of piracy around the world,” said
BSA president and CEO Robert Holleyman. “As broadband growth continues and the
IT sector expands, the influx of new users and the increased availability of
pirated software means continual efforts are required to reduce and keep
software piracy down.”

A previous CAAST/BSA-IDC study showed that if the global piracy rate were
to drop 10 points to 25%, it would create as many as 2.4 million new jobs,
CDN $465 billion in economic growth, and CDN $77 billion in tax revenues
worldwide. In Canada, a 10 percentage point reduction in software piracy over
a four year period could yield CDN $8.1 billion in economic growth, CDN
$2.3 million in tax revenues and 14,000 new jobs.