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Properly licensed software can help boost local economy: BSA and INSEAD study

Jack Loo | May 22, 2013
A one percent rise in use of licensed software would add millions of dollars to Singapore economy

A one percent increase in use of licensed software would generate an estimated US$312 million in national production, compared to US$72 million from a similar increase in pirated software, according to a study from BSA | The Software Alliance and business school INSEAD.

"Using properly licensed software reduces risk and creates operating efficiencies that go directly to the bottom line for enterprises," said Roland Chan, BSA's senior director, Marketing - Asia Pacific. "This study confirms that licensed software is not just good for firms - it is an important driver of national economic growth. Government, law enforcement, and industry in Singapore should take every opportunity to reap these potential gains by reducing piracy and promoting use of properly licensed software."

The report, Competitive Advantage: The Economic Impact of Properly Licensed Software, is an analysis that draws on data from 95 economies - of which 15 are from the Asia Pacific - to demonstrate the benefits to national economies of using fully licensed software.

The study also finds that each additional dollar invested in properly licensed software has an estimated return on investment (ROI) of US$60. This compares to a US$28 return from each additional dollar worth of pirated software put into use.

On a dollar-for-dollar basis, the return on investment from using properly licensed software is greatest in developing economies - US$437 in extra GDP, on average. Still, economies across all income levels benefit: each additional dollar invested in licensed software has an average ROI of US$117 in high-income economies and US$140 in middle-income economies.

"Previous studies have shown that value-added services delivered with properly licensed software help firms to reduce costs and increase their productivity. This report goes one step further to ascertain the impact of software use on national production," said Eduardo Rodriguez-Montemayor, senior research fellow at INSEAD eLab. "The results make it clear that licensed software is beneficial for business and national economies - and that licensed software has a greater economic impact than pirated software across all economies included in the study."


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