Software Piracy Shows Small Decline in U.S.

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A new study shows that software piracy is on the decline in the United States, but it remains a problem that is dragging on the economy and costing jobs.

The U.S. piracy rate dropped two points from 2001, going from 25 percent to 23 percent, according to a new report from the Business Software Alliance (BSA), a Washington, D.C.-based international organization representing software developers. BSA reports that software piracy cost the U.S. $1.9 billion last year, up from $1.8 billion in 2001.

Last year's piracy rate reportedly resulted in more than 105,000 lost jobs. Industry analysts generally agree that piracy depletes available funding for software research and development, causing layoffs in the industry and billions of dollars in lost wages and tax revenues.

''It is encouraging news that the U.S. piracy rate has dropped two points from 2001, but there is no acceptable level of piracy,'' says Robert Holleyman, president and CEO of BSA. ''We attribute this decrease to BSA's expanding educational initiatives, our work with governments and our efforts to emphasize to U.S. businesses the need for effective internal software asset management programs.''

This report upholds a recent BSA study that showed that software piracy has declined around the world, decreasing 10 points over the past eight years. The piracy rate for commercial software dipped down to 39 percent in 2002, compared to an all-time high of 49 percent in 1994.

The study shows that worldwide, every country except Zimbabwe has reduced its piracy rate since 1994, the first year the study was done.

The Alliance study shows that the Middle East and Africa, as a region, are showing the highest rate of improvement. The region had an 80 percent rate in 1994, but that number dropped to 49 percent in 2002. The most improved country is the United Arab Emirates with a 50-point drop, taking them from 86 percent in '94 to 36 percent last year.

Eastern Europe holds onto the infamous rank of having the highest piracy rate. It came in with 85 percent eight years ago and today shows a 71 percent rate. Despite being at the top of the list, it is the fourth most improved region.

The new BSA report also listed the states with the most improved software piracy rates in 2002.

Louisiana came in the top spot with a 14-percent drop, going from 44.6 percent in 2001 to 30.6 percent last year. Maine holds the second spot with a 11.1 percent drop, going from a rate of 44 percent in 2001 to 32.9 percent in 2002. Oregon, West Virginia and Idaho rounded out the top five.

The top five states with the lowest piracy rates in 2002 are: Illinois, Michigan, Ohio, Indiana, New York. Washington is one of the top 10 states with the lowest piracy rates and also has one of the most improved piracy rates from 2001 to 2002.

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