The South China Morning Post reports:

The mainland’s information technology sector could reap a hefty windfall should the government succeed in curbing software piracy by up to 10 per cent over the next few years.

A study released last week by pirate software watchdog Business Software Alliance (BSA) and research firm International Data Corp (IDC) estimated a reduction of that size would give the domestic IT industry an additional 355,000 jobs, US$1.6 billion in tax revenue and contribute US$20.5 billion worth of economic growth by 2011.

The incremental boost to the mainland economy would add highly skilled workers, fund public services, and support the creation of new companies, the BSA said. The findings come amid continued efforts by software companies in the mainland and the United States to attack the problem in the courts and within their ranks.

Don’t bother looking for any explanation of the methodology behind these numbers. It’s all based on IDC “estimates” and “forecasts” as well as “macroeconomic data” (from the Economist Intelligence Unit, amongst others).

The report has no breakdown of the impact of software piracy on international firms’ software versus domestic firms’ software. There’s no answer to the obvious question of how much of the putative 82% of PC software that’s pirated are Microsoft products. Just a big, scary number.

The handy chart in the report explains that 77,850 jobs would be added in 2008 by that 10% reduction. They don’t explain why more revenue would translate into more jobs. Furthermore, they don’t explain the impact on jobs of people supporting pirated software. Most small Chinese IT companies are usually more than happy to install and support pirated software. They may lose out on license sales, but they do make money on services and support. Particularly for the consumer market in the computer malls providing free software is part of the service. If everyone had to buy all the software installed on a PC, they wouldn’t buy one.

The BSA regularly churns out studies on the evils of software piracy. Although it’s obviously a form of theft, and the software companies are certainly the victims, these grandiose claims of money and jobs accrued by unleashing the anti-piracy hounds are PR pablum. There’s no evidence to back it up. Even the basic premise that software piracy is bad can be questioned.

There’s a very tricky relationship between the growth of IT adoption, software piracy, IT services, and the software business model. What would China’s IT market look like today if there never had been unrestrained software piracy? How many software developers work with pirated software tools and platforms? How many Windows machines would there be to support if all were licensed? What’s the relationship between widespread software piracy and branding? How long will software continue to be sold “packaged”? How long before the subscription model replaces the license model?

I don’t have the answers to these questions or any estimates or forecasts, but software piracy is quite common in China’s consumer and SMB markets. The government has made some progress in attacking it, but it’s too pervasive to be stamped out anytime soon. The BSA’s recommendation of “national internet protocol enforcement units, cross-border co-operation and more training for local officers while improving public education and awareness” is about as substantive as their report. China has the legal anti-piracy infrastructure in place and is moving in fits and starts to broaden its coverage. Silly bromides will do nothing to speed the process.

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