Amy Lee (Asia) - Software Piracy in China and Hong Kong

Most users are unaware of the economic implications brought on by the use of pirated and counterfeit software, but the fact remains that using fake software not only puts one’s personal information at risk, it is also a threat to the economic landscape.  Intellectual property is always a huge economic issue that is beginning to strain relations between countries with tighter IP and copyright laws.

77% of computer users in China admit they have acquired pirated software, the Business Software Alliance (BSA) reported today in the 2011 BSA Global Software Piracy Study, much higher than the average piracy rates in the APAC region (60%), BRIC countries (70%) and globally (42%). Some users say they pirate all or most of the time, while others say they do so only occasionally or rarely. This behavior led to a 78% software piracy rate in China last year, meaning more than 7 out of 10 programs that users installed were unlicensed. Does it mean anything for enterprises in HK?

As the springboard for many enterprises looking to get into China, the piracy rate in Hong Kong is also a serious concern among international enterprises when entering the market. Piracy in Hong Kong is much lower, with the proportion of PCs using pirated software falling to 43% in 2011, a record low and a 10 point decline since 2006. These findings demonstrate the great progress that the Hong Kong government has made in reducing software piracy, but there are still ways to go. Only through the continued concerted efforts of the government and industry sectors, in both law enforcement and public education, will software piracy be effectively brought under control.

To effectively tackle software piracy, BSA offers a number of recommendations:

•    Increase public awareness about software piracy and IP rights in cooperation with industry and law enforcement

•    Modernize protection methods for software and other copyrighted materials to keep pace with new innovations such as cloud computing and the proliferation of networked mobile devices.

•    Strengthen enforcement of IP laws with dedicated resources, including specialized enforcement units, training for law enforcement and judiciary officials, improved cross-border cooperation among law enforcement agencies, and fulfillment of obligations under the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

•    Lead by example by using only fully licensed software, implementing software asset management programs, and promoting the use of legal software in state-owned enterprises, and among all contractors and suppliers.

The negative impact of software piracy is not limited to these consumers, who spend millions each year on software; it also has a negative impact on local and regional economies. Software piracy is a persistent drain on the global economy, IT innovation and job creation, and it is estimated that software piracy will cost technology companies billions of dollars in revenues. According to the Piracy Impact Study 2010, reducing the piracy rate for PC software by 10 percentage points – 2.5 points per year for four years – would create $142 billion in new economic activity while adding nearly 500,000 new high-tech jobs and generating roughly $32 billion in new tax revenue by 2013. Governments must take steps to modernize their IP laws and expand enforcement efforts to ensure that those who pirate software face real consequences.

Amy Lee, chair of the Hong Kong and Macau committee of BSA.


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