Software piracy plangue Indonesia

Software piracy plangue Indonesia

Vishnu K. Mahmud, Contributor, Jakarta

During the Microsoft Asia Student dot-net Competition held
last September in Jakarta, Andrew McBean walked around and met
some of the contestants. He found an excellent banking
application made by a group of university students and encouraged
them to package and sell it. Their response was: "No one would
buy it". They feared that once their product got out into the
market, it would only be a matter of time before it fell into the
clutches of software pirates.

Such disheartening thoughts trouble McBean, the new President
Director for Microsoft Indonesia. It is a well-known fact that
the infringement of intellectual property rights (which includes
computer software, music and movies) is pretty much rampant in
Asia with Indonesia and Vietnam leading the pack.

You can find the latest movies on VCD's (video compact disc)
in Jakarta just days after they are released in the US for a mere
US$2. Thousand-dollar enterprise level software can be found for
just under $5. And those who profit from these sales are not the
directors, actors, software developers or singers who toiled
endlessly for the product -- but the CD copying counterfeiters.

Many people scoff at the importance of intellectual property
rights (IPR). They reason that, because items such as computer
software are too expensive to purchase in Indonesia, it's no
wonder that people turn to pirated versions. After all, if they
cannot afford the licensed version of Microsoft Office, they will
never buy it anyway, so Microsoft hasn't really lost any revenue.
And besides, Bill Gates is the richest man on earth!

But "saving" money by purchasing bootlegged products does in
fact have serious consequences.

"Rampant copyright infringement is blunting the creativity and
inventiveness of Indonesians. The nation's indifference to
copyright piracy is killing indigenous talent," says a recent
Business Software Alliance report on piracy in Indonesia. McBean
points to the university students he met at the competition as a
prime example.

Those students had created a software application they could
potentially charge millions of rupiah for per license, yet they
are unable to do so because their potential clients could
probably pick up a copy at a sidewalk stall for only Rp 20,000.

And it does not affect the software industry alone. The local
film and music industries are struggling in part because their
offerings are copied and redistributed by bootleggers. Who would
want to make a movie or produce a record if bootleggers undercut
the return on investment?

McBean points to India as an excellent model for fighting
counterfeit products. Despite its high population and low per
capita GDP, their piracy levels are at 55 percent (compared to
Indonesia's 89 percent). By enforcing intellectual property
rights, India has managed to generate a software export business
worth $8.5 billion.

The Indian software industry alone provides over 124,000 jobs.
It not only makes software for the overseas market but also
devises competitive solutions for the local industry. Although
the sub-continent is not as 'wired' as Singapore or Malaysia, the
breadth of IT knowledge is astounding.

By enforcing copyright laws, entrepreneurs could write
software, support other industries (housing, food service, IT
support and education), create quick, effective solutions for
local problems and stimulate the regional economy. Governments
would be able to collect more taxes from not only the software
industry but from the other businesses that spring up in support
of it as well. Ultimately, governments can explore the
possibilities of a prosperous software industry (along with the
movie and music business) by helping to protect intellectual
property rights.

Although Microsoft Indonesia recently won a copyright court
case against system builders who installed unlicensed copies of
their operating system, they are looking at other methods to help
lower the percentage of counterfeit products. More importantly,
McBean is looking into ways to invest in the community by helping
to create an effective computer industry.

"Our piece of a truly richer computer industry in Indonesia
will be a far more sizable piece of revenue to us than if we are
just here bashing people with a piracy hat on," he says.

Microsoft is looking at partnerships with system builders,
presenting channels for independent software vendors and finding
unique ways for people to buy licensed software. By helping
people realize that software has value and is a necessity, they
should start to buy it as if they were purchasing a hat, hand-
phone or house. At the moment, many people would consider the
value of computer software to be zero, or at least "not worth the
published price".

It should be appreciated that software development does not
come cheap. It includes programming, testing, research and
development; just like making a computer processor. But people
don't consider Intel chips as worthless and try to obtain a
pirated chip.

In 1999, the software industry lost $42 million in Indonesia.
Computer users here can perhaps translate that amount as a
"saving" generated by the non-purchase of software. However, that
$42 million has probably cost Indonesia at least half a billion
dollars in lost business revenue, expenditure, jobs, services and
taxation. Well, at least we saved $42 million.