Use of licensed software can boost Indian economy

The increasing the use of properly licensed software could boost the Indian economy, compared with allowing similar growth in the use of pirated software, according to a study by The Software Alliance (BSA) and INSEAD.

For example, increasing use of properly licensed software by 1 percent would add US$20 billion to the U..S economy, US$7.6 billion to the Japanese economy, and US$1.2 billion to the Indian economy, according to the joint report Competitive Advantage: The Economic Impact of Properly Licensed Software released in May.

Use of pirated software is a common malaise in small and medium businesses (SMBs) in India. Most SMBs, especially those in non-technology domains, use pirated software for office productivity, publishing, designing, and accounting. Recently, software majors like Adobe and Microsoft have started offering software as a subscription at very competitive prices to convert such customers to genuine software.

The study states that an 1 percent increase in use of licensed software would generate almost US$1.3 billion in national production, compared to US$554 million from a similar increase in pirated software--a staggering US$739 million in additional economic value!

The study also finds that each additional dollar invested in properly licensed software has an estimated return on investment (ROI) of US$75. This compares to a US$19 return from each additional dollar worth of pirated software put into use.

While the government should establish strong and modern intellectual property laws that protect software and other copyrighted materials on PCs, mobile devices, and in the cloud, there is a definite need to step up enforcement of intellectual property rights with dedicated resources as well as raise public awareness about the risks of software piracy. 

"Using properly licensed software reduces risk and creates operating efficiencies that go directly to the bottom line for enterprises," said Yolynd Lobo, BSA's director for India.

Lobo added the study confirmed that licensed software was not just good for firms--it was an important driver of national economic growth. Government, law enforcement, and industry in India should take every opportunity to reap these potential gains by reducing piracy and promoting use of properly licensed software.

BSA is a nonprofit trade association dedicated to promoting a "safe and legal" digital world. Insead is one of the world’s leading and largest graduate business schools.