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DQI Bureau
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Did you know that the unmatchable intellectual pool in India is constantly spurring technological innovation and new ideas, which are being transformed by the IT sector into economic opportunity–creating new jobs, new businesses and additional tax revenues for the government?

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If I was to quote numbers to substantiate this claim, you will be surprised to learn that India’s skilled workforce and prospering software industry have helped the country’s domestic IT sector grow to nearly $6.5 billion! What is startling though is that this total can more than double, say to $13 billion, in the next three years if software piracy is reduced from the current 65% to 70% rate, as per a recent BSA-IDC study. This will further translate into creation of nearly 50,000 new IT jobs–more than two-and-a-half times the number now available in the domestically focused portion of India’s software industry and generate an additional $92 million in tax revenues. Impressive, isn’t it?

Kiran Karnik
“Even though India has some of the strongest copyright laws in the world, the enforcement is weak”

But in case you cannot understand the connection, let me explain. The rate of innovation in the software industry equals economic growth and prosperity, and is directly proportional to the IPR (Intellectual Property Rights) environment in a country. This means that countries that tighten and enforce their intellectual property laws, and consequently have lower rates of software piracy, will spur innovation and enjoy vast IT sector benefits, create new economic opportunities and become more productive.

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Therefore, today IPR law is the focus of intense interest. It is being viewed as a development tool, with the overriding belief that strongly protecting the rights of inventors is automatically good for all. In today’s “knowledge economy”, strong IPR laws are seen as necessary stimuli for fostering domestic innovation, boosting foreign investment and improving access to new technologies.

As the Indian software industry has become a major force in the international arena, it has to take the lead in curtailing piracy.

Clearly, as sectors of the Indian economy globalize in an increasingly knowledge-based world, the relevance of IPR has increased. It is an accepted fact that a well-functioning IP system takes a country’s intellectual capital and channels it into economically productive uses. The impact on the economy is not inconsequential. The country bore losses of a whopping $365 million in 2000-01 due to software piracy. This presents a huge cause for concern, especially considering that India’s software and services industry is one of the largest providers of intellectual capital and reason for FDI inflow into the country.

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It is even more distressing if we were to gauge the impact of software piracy on the entire software ecosystem as a whole. From the end customer’s point of view, the wide availability of cheap look-alikes and counterfeit products defrauds him of his right to use quality products. At the same time, software companies get disillusioned with no incentive to invest in R&D for promoting technological innovation. This has a ripple affect on developers who get cynical with no rewards for their innovation and start looking for alternative avenues. This also impacts legitimate resellers/distributors since pirated software results in sales losses, which in turn creates unemployment and loss of revenue opportunities for the channel community. Also, with fewer legitimate sales, a smaller number of end customers are entitled to after-sales support services, thereby choking opportunities for support providers.

It is not as if no one has presented this larger picture before, but what is surprising is that even though the Indian government recognizes this fact and has some of the strongest copyright laws in the world, enforcement of the same needs to be ensured.

What is needed, therefore, is a three-way partnership model whereby the government, end users and the industry work together towards making India a zero piracy country.

To conclude, I would like to say that even though the original premise for IPR protection was to encourage innovation, and thus growth, we need to view it as a development tool that can help jumpstart economies on the path of growth and prosperity.

Kiran Karnik



The author is the president of Nasscom

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