A shake-up of copyright laws could add nearly 8 billion pounds to the economy by putting it on par with international competitors, an independent report welcomed by government ministers said on Wednesday.
The Digital Opportunity review was commissioned to address concerns that Britain's "archaic" intellectual property laws have failed to keep pace with how music and media are used around the world in the internet age.
Led by Professor Ian Hargreaves of Cardiff University, its key recommendations included a Digital Copyright Exchange where licences in copyright can be bought and sold, and legislation to permit access to orphan works whose owners cannot be traced.
Under current laws, if one owner out of hundreds on a film or TV programme cannot be traced they effectively hold the others to ransom as it becomes a criminal offence to exploit that work commercially, the review said.
"In recent years, the UK has failed to make the changes needed to modernise copyright law, for which we will pay an increasing economic price as we make our way into the third decade of the commercial internet," Hargreaves said.
"The recommendations of the review are designed to enhance the economic potential of the UK's creative industries and to ensure that the emergence of high technology businesses, especially smaller businesses, in other sectors is not impeded by our IP laws."
The review estimated the impact on growth of adopting each of its recommendations and predicted it would be between 5.5 and 7.9 billion pounds a year.
"The team's estimate is that if the review's recommendations are implemented in full, they will add between 0.3 and 0.6 percent to the UK's annual GDP growth, not counting significant reductions in transaction costs for the public and private sectors, which the team puts at 750 million a year," it said. British copyright laws have been criticised in the past for hampering creativity and investment.
Prime Minister David Cameron called for a review in a speech last autumn, when he told his audience: "The founders of Google have said they could never have started their company in Britain."
The Confederation of British Industry (CBI) employers' group welcomed the copyright exchange proposal, but said it was relieved the review focused on promoting market access rather than more radical reform such as the adoption of fair use principles used in the United States.
"The Exchange should make it easier for businesses and individuals to legitimately access and pay for copyrighted material, while allowing rights owners to retain control of how their content is used and sold," said CBI chief policy director Katja Hall.
"Firms will now be looking for reassurance from the government that it will champion international enforcement, which is so critical to an export-led economic recovery."
The review also calls for the widespread practice of format shifting for personal use — copying CDs or DVDs onto digital music players or computers — to be legalised, in a move it says could help academics draw on wider research.
It has already been legalised in all European countries with the exception of Britain, the Republic of Ireland and Malta.
"The report highlights real scope for changes to copyright laws which could add enormous value to the UK economy," said business secretary Vince Cable, who gave a speech welcoming the review at a conference in London on Wednesday.
Minister for intellectual property Baroness Wilcox said the government would seriously consider the recommendations and respond soon.
