Of every 10 pieces of commercial software purchased in Latin America last year, six were illegal copies. According to the Software & Information Industry Association (SIIA) in Washington, D.C., which produces annual estimates of software piracy levels for individual countries worldwide, this puts the region roughly in the middle of the global piracy spectrum. At one extreme are countries like Vietnam and Russia, where the piracy rate is more than 90 percent (meaning that the ratio of legal to illegal software is nearly 1 to 1); at the other stands the United States and Japan, where the piracy rates are 25 and 31 percent, respectively.
In Latin America, the piracy rates range between a high of 87 percent in El Salvador and Bolivia and a low of 53 percent in Chile. The SIIA estimates that U.S. software companies lost $1 billion in potential revenues in Latin America because of piracy in 1998. On a brighter note, the association finds that piracy has been declining steadily in Latin America over the last five years as it has in much of the world.
There are a number of reasons for the decline. It is simply getting easier to buy software legally, as multinational companies beef up their marketing resources in developing countries. Software companies are also improving local technical support for their products, which creates an incentive to own legal copies. Economic growth and trade liberalization have helped to lower the price of software in many countries, and governments everywhere are gradually strengthening enforcement of intellectual property laws.
In Latin America, software piracy has sometimes been portrayed as a “gringo” problem, because of the near-monopoly that U.S. firms have in this sector. But in recent years, a growing number of Latin software firms have begun to compete with their giant U.S. counterparts, both on the home turf and abroad (see article "Costa Rica brews a new blend of java"). For the people who work in these new companies, software piracy is becoming a very personal concern.
“To create an investment climate where local information needs can be met by local companies, you need both incentives to produce software (through strong anti-piracy laws) and incentives to keep prices low (through trade policies that encourage genuine competition),” says Robert Vitro, a sector specialist in the IDB’s Information Technology for Development Unit. “From this perspective, the interests of producers in Latin America are increasingly similar to those in the U.S. and the rest of the world.”