Software Piracy Cost Minnesota Economy Over 3,000 Jobs And $340 Million in 1997

BLOOMINGTON, Minn., Jan. 11, 1999 — Microsoft Corp.’s Bloomington office today released statistics revealing that Minnesota lost over 3,000 jobs and $340 million in combined wages, tax revenues and retail sales in 1997 as a result of software piracy.

Officials at the company also announced an increased commitment to fighting for the protection of intellectual property throughout Minnesota’s high technology sector. Microsoft will work with the Minnesota High-Tech Association (MHTA) and other local technology companies and organizations to increase awareness that the detrimental effects of intellectual property theft, such as software piracy, reach beyond just the software industry to affect consumers, local businesses and the economy.

“Microsoft is intent on helping Minnesota continue its leadership in technology-based industry,” said Diane Eaton, general manager of Microsoft’s North Central District. “Software piracy – the theft of software through illegal copying of genuine programs or through counterfeiting and distribution of imitation products – harms unsuspecting customers and robs businesses of legitimate revenue and workers of wages, stifling the flow of dollars through the economy. It is imperative that we work together with other organizations committed to the protection of Minnesota’s technology sector to educate the public and fight this threat.”

“In addition to hampering the Minnesota economy, software piracy damages the integrity of intellectual property – the fundamental product of the information age,” said Vance Opperman, president and CEO of Key Investments Inc., a Minneapolis-based venture capital firm, and chairman of the intellectual property subcommittee of the MHTA. “To foster the creativity and knowledge of our state’s entrepreneurs and thereby increase economic contributions in Minnesota, we must expel the destructive forces of copyright, patent and trademark infringement.”

Minnesota’s piracy rate of 27.9 percent deprived the state of approximately 3,100 jobs and more than $115 million in wages and salaries, a direct hit to the pocketbooks of Minnesota workers as well as to the industries that would have benefited from funneling these dollars back into the state economy. Furthermore, the data shows that piracy resulted in the loss of more than $23 million in tax revenue, $11.5 million of which would have contributed to state and local improvement projects.

To obtain the economic data, International Planning & Research Corp. of Redmond, Wash., used information from a 1997 international piracy study published by the Business Software Alliance (BSA) and the Software Publishers Association (SPA) along with additional data and analysis of piracy in Minnesota. Over the next several months, Microsoft will release statistics on the negative impacts of software piracy for every state in the United States.

The software industry is a significant driver of the current economic prosperity in the United States, accounting for the creation of more than 2 million jobs, $102.8 billion in software and software-related services, and payment of $7.2 billion in taxes. However, software piracy threatens the ability of the industry to continue to contribute to the American economy. According to a 1997 study by Nathan Associates of Arlington, Va., commissioned by the BSA,

software piracy in 1996 resulted in the loss of 130,000 jobs in the United States, $5.3 billion in wages and salaries and nearly $1 billion in tax revenues.

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448), or send
e-mail to piracy@microsoft.com. Resellers may obtain information regarding the Microsoft System Builder Program, OEM products and authorized distributors at http://www.microsoft.com/oem/ . Customers and resellers can also obtain information about software piracy by calling the Business Software Alliance anti-piracy hot line at (888) NO-PIRACY (667-4722) or sending e-mail to software@bsa.org.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

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