Economic benefits of lowering software piracy: new jobs, more tax revenue in UAE

The United Arab Emirates, a country of more than 4 mln people, spent nearly $2.7 bln in 2007 on information technology – computers, peripherals, network equipment, packaged software and IT services. That spending accounted for 1.5% of gross domestic product (GDP), supported more than 4,400 IT companies with nearly 33,400 IT industry employees, and helped generate $670 mln in IT-related taxes.

Yet the IT sector’s contribution to the could be even bigger if UAE’s PC software piracy rate were to be lowered 10 percentage points over the next four years, creating an additional 710 jobs, $238 mln in local industry revenues, and $44 mln in additional taxes revenues for federal, regional, and local governments. Lowering piracy in other software categories could double the economic benefits.

This incremental boost to the economy would add highly skilled jobs to the labor force, support the creation of new companies, and fund public services. Because most of the benefits accrue to services and channel firms, most of the benefits from lowering piracy stay within the country.  For an economy the size of United Arab Emirates‘, even this small increment of IT-related employment would have an impact.

“Our concerted efforts in combating piracy have delivered significant positive results to the economy, particularly the sustained growth of the IT sector,” explained Mohammed bin Abdulaziz Alshihhi, Undersecretary – Planning Sector, UAE Ministry of Economy.

“The Ministry of Economy agrees with the report produced by BSA and IDC pointing out the critical importance of further lowering the UAE’s piracy rate, which will be a significant step towards achieving sustainable levels of development in the future.”

Lowering PC software piracy delivers such benefits because other sectors derive revenue from working with, installing, servicing, and reselling software.

Therefore, a 10 percentage point drop in PC piracy not only impacts the performance and economic contributions of the overall software industry, but also ripples outward into the IT services and distribution sectors, each of which is larger than the software industry itself.