Software Piracy Cost Illinois Economy Over $560 Million in 1997

DOWNERS GROVE, Ill., Feb. 1, 1999 — Microsoft Corp.’s Illinois office today released statistics revealing that software piracy caused the loss of an estimated 5,600 jobs in Illinois and more than one-half billion dollars in combined lost wages, tax revenues and retail sales in 1997.

The information was released as part of an educational effort by Microsoft to raise awareness that software piracy hurts more than just the software industry. The data underscores how software piracy – the theft of software through illegal copying of genuine programs or through counterfeiting and distribution of imitation products – adversely affects local businesses and economies. International Planning & Research Corp. of Redmond, Wash., used data 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 Illinois.

“The most distressing part of these findings is the impact software piracy has on our communities,”
said Paul Houghton, general manager of Microsoft’s Midwest district.
“Schools suffer because the tax base has been deprived due to software piracy. Families suffer because wages are lost when jobs are taken out of the legitimate channel. By making people aware of such consequences, we hope to further contribute to the strength of the Illinois economy.”

According to Microsoft, the software piracy rate in Illinois of 22 percent in 1997 cost the state’s workers approximately 5,600 jobs translating into more than $206 million in wage and salary losses. In addition, the data shows that Illinois lost more than $23 million in state tax revenues that could have contributed to local and state improvement projects.

“At 22 percent, Illinois’ software piracy rate had alarming negative effects on the tax base and the number of jobs lost in the state,”
said Candace Renwall, executive director of the Chicago Software Association.
“The software industry must focus its efforts on fighting the crime of piracy, which, in turn, will help strengthen our local economy.”

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 Inc. of Arlington, Va., commissioned by the Business Software Alliance, 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 [email protected]. More information about software piracy can also be obtained by calling the Business Software Alliance anti-piracy hot line at (888) NO-PIRACY (667-4722) or sending e-mail to [email protected].

Founded in 1975, Microsoft (Nasdaq
) 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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