Georg Herrnleben Director, Central & Eastern Europe BSA

1. Software Piracy in PolandIndustry losses and economic impact Georg Herrnleben Director, Central & Eastern Europe BSA

2. The IDC studies BSA regularly commisions and co-authors two studies executed by research analyst IDC on the scope, development and effects of software piracy worldwide. These studies – the IDC Piracy Study and the IDC Impact Study – cover some 80 countries in detail.

3. Methodology of the IDC Piracy study The percentage of all software used that is not licenced is here called the piracy rate. The market value of the software pirated is labeled as piracy damages. In 2006, the global piracy rate was 35%, while the damages were 39,6 billion US-dollars (USD). In short, both the rate and damage are calculated by measuring the demand for software as estimated by the number of new PCs sold in a given country against the amount of software licensed, while correcting for local differences such as open source usage, amount of software installed on the average PC and so on.

4. 58% 59% 58% 57% 45% 40% 35% 30% 25% Piracy rate 20% 15% 10% 5% 0% 2003 2004 2005 2006 Poland: piracy rate development

5. 500 484 388 400 379 301 300 Damages in 200 million $ 100 0 2003 2004 2005 2006 Poland: piracy damages development

6. Software Piracy in Europe: EU 70% 61% 60% 57% 56% 51% 50% 46% 45% 43% 42% 40% 39% 36% 30% 29% 29% 28% 27% 27% 27% 26% 26% 26% 25% 20% 10% 0% UK Italy Spain Latvia France Poland Finland Ireland Austria Norway Greece Hungary Belgium Portugal Sweden Germany Denmark Czech Rep. Switzerland Netherlands

7. Software Piracy in Europe: Non - EU 84% 90% 80% 80% 69% 69% 70% 55% 60% 50% 40% 29% 26% 30% 20% 10% 0% Russia Croatia Norway Ukraine Bulgaria Romania Switzerland

8. Damages in Europe (EU) 3000 2500 2000 1500 1000 500 0 UK Italy Spain Latvia Finland Poland Ireland France Greece Austria Norway Belgium Hungary Sweden Portugal Germany Denmark Czech Rep. Switzerland Netherlands USD millions 484

9. European overview On a pan-European scale, software piracy is widespread especially in southern European countries, while the Nordics, central Europe and the UK have been among the most compliant in recent years. A continuing positive development in the EU accession states has led to a situation where the rates in Hungary (42%) and the Czech Republic (39%) are now lower than those in France (45%) or Italy (51%).

10. Worldwide situation CEE America Western Europe Lat. Asia/Pac. East/Africa N. America Middle Piracy Rate Damages 55%/11,6 bn $ 34%/10,6 bn $ 22%/8,1 bn $ 68%/4,1 bn $ 66%/3,1 bn $ 60%/2 bn $

11. Software piracy Study: scope and damage • Global study of rate of unlicensed software in use • Worldwide losses: 39,6 billion USD • highest overall losses: USA (7,3 bn. $), China (5,4 bn.), France (2,6 bn.) • Piracy worldwide: 35% • Lowest rates: USA (21%), New Zealand (22%), Japan, Denmark (25%) • trouble spots: Russia (80%, 2,2 bn. $), China (82 %, 5,4 bn $), Armenia (95%, 8 million $) • General trend: low piracy rate, established software & IT-industry

12. IDC Impact Study : Expanding the frontiers of our digital future • Analysis of IT-industries in various countries • Prognosis of development until 2011 • Scenario: 10 percent reduction of software piracy rates

13. Poland until 2009 in 2007: • 8,1 billion USD revenue in the IT-Industy • 92.500 IT employees • 2,8 billion USD IT tax revenue 2011 without reduction of piracy rate • 12,2 billion USD revenue in the IT industry • 122.040 IT employees • 4,2 billion USD IT tax revenue Piracy rate of 57 % causes annual revenue losses of 484 million dollars.

14. Economic impact of reduced piracy rate in Poland • Reduction of 2,5 % annually would mean: • 1.900 additional jobs (123.940 in total) • 110 million dollars additional tax revenue • 725 million USD additional IT revenue

15. Thank youMore information atwww.bsa.org