Report: Chinese businesses running on unlicensed software

Josh Peterson | Tech Editor

China’s economic growth is being propelled forward by the growing rate of Chinese corporations using pirated software, according to a recent report from the Business Software Alliance.

Published on Tuesday, the report concluded that for every personal computer legitimately sold in China in 2011, there was approximately $8.89 of legal software being used. This is in comparison to the $120 of legal software for every legitimately sold personal computer in the U.S. that year.

Robert Holleyman, president and CEO of the Business Software Alliance, told The Daily Caller that the benefits to businesses currently using unlicensed software in China for the productivity of their business far outweighs any cost or penalty businesses face due to the lack of a enforcement.

Businesses in China have a close relationship with the government, and the massive profits gained from using the software allows them to make larger investments.

“The problem in that is that China has not yet utilized transparent, world-class practices in businesses to manage software,” Holleyman told TheDC.

While the U.S. is applying significant pressure on the Chinese government to reform how piracy is enforced, it will continue to fall short due to the the lack of a “sheriff in town” to install and enforce practices that would produce measurable results, Holleyman said.

China is, however, only a part of the growing problem for U.S. software companies. The problem is global, but is particularly symptomatic of emerging economies. The global piracy rate “hovered” at 42 percent, but in 2011, the value of unlicensed software increased from the year before — $58.8 billion in pirated software used across the world — to $63.4 billion.

Fifty-six percent of personal computers sold in emerging markets in 2011 used unlicensed software, compared to 19 percent of personal computers sold in the U.S. during the same year.

“Emerging economies, which in recent years have been the driving force behind PC software piracy, are now decisively outpacing mature markets in their rate of growth,” the study said.

“I think that if you look at the trends of what we see, the problem will continue to grow year after year,” Holleyman said.

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