RI's IT sector could double in size: BSA

Agencies, Jakarta/Singapore

If it were not for software piracy, the Information Technology (IT) industry in Indonesia would have created new jobs and increased local industry revenues.

A study by the Business Software Alliance (BSA) -- an international organization actively fighting the use of illegal computer software -- claimed on Thursday that a 10-point reduction in the country's current 87 percent piracy rate would yield growth in the industry of more than US$4.2 billion by 2009.

Should the piracy rate be decreased to 77 percent, the country would add $3.3 billion to its economy within four years, create 3,000 more job opportunities in the sector and increase local industry revenues by more than $1.5 billion, the study claimed.

Overall, the benefits could generate an additional $152 million in taxes.

"It is clear from the study that software piracy is not only about stealing software. It steals jobs, tax revenues and economic growth," BSA Indonesia Committee chairman Ronald Chua said in a statement sent to The Jakarta Post.

"The government must take tangible steps to protect intellectual property and reduce software piracy," he added.

The government has banned the use of unlicensed software programs as stipulated in the copyright law No. 19/2002. The law states that perpetrators can be sentenced to a maximum of five years imprisonment and fined up to Rp 500 million (US$51,000).

BSA highlighted that demand for software in Indonesia between 2000 and 2004 grew by 34 percent -- the fastest growth in the IT sector in the region.

By reducing its software piracy rate, the country's growth could have stood at 152 percent instead of the projected 79 percent between 2004 and 2009.

In the study -- conducted by research firm International Data Corp. -- Indonesia had the third-worst record with 87 percent of software illegally acquired, a 1 percent decrease from the previous study of 88 percent.

The biggest culprits in the Asia Pacific region were Vietnam, which topped the list with a piracy rate of 92 percent, followed by China at 90 percent. Thailand took fourth spot at 79 percent.

"Software is the driving force behind growth in the IT sector, which also includes hardware and IT services," Hardee said as quoted by AFP. "When countries take steps to reduce software piracy, just about everyone stands to benefit."

BSA revealed that the regional software piracy rate was 53 percent in 2004, unchanged from the previous year. Globally, the situation improved slightly to 35 percent from 36 percent illegally downloaded in 2003.

If efforts to cut the piracy rate by 10 percentage points to 43 percent by 2009 are successful, $135 billion could be pumped into the region's economies and state coffers boosted by an extra $14 billion in new tax revenues, the association said.

Asia's IT industry is worth $195 billion and brings in at least $120 billion in tax revenues, BSA said.

Citing China as a case study, BSA said the world's fastest- growing economy stood to gain the most of any other country if software piracy could be cut by 10 percentage points from the rate of 90 percent in 2004, which was an improvement from 92 percent in the previous year.