Economics prof denies digital pirates plundered €20bn from EU coffers

Rubbishes recent biz bod report on counterfeiting and piracy

A European academic has rubbished claims by the Business Action to Stop Counterfeiting and Piracy (BASCAP) group that digital piracy cost the EU more than €20bn between 2008 and 2011.

Making the assumption that the creative and service sectors performed at the same level, a grand total of around one million jobs and €47bn of added value would have appeared in the former, according to the study.

The research was carried out on behalf of the group by Paris-based economics firm TERA Consultants.

Without piracy, the value added and employment levels in the creative industries would have evolved in the same way, and at the same level, as the overall economy, claimed BASCAP.

But Leonhard Dobusch, assistant professor of Organization Theory at Freie Universitat Berlin, disagrees. “Piracy may well cause losses in some industries, but these are not losses to the national economy.

"Rather, people spend money differently — whether this leads to a net loss in value added or jobs is difficult to know — and not even mentioned in the study. And why compare creative industries to the service industries, which are much less susceptible to economic downturns and technological change?”

The report, published on Wednesday, is a follow-up to a 2010 study by the same group, which concluded that without significant policy changes, the EU's creative industries could expect to see cumulative retail revenue losses between €166bn and €240bn by 2015, resulting in up to 1.2 million job losses.

The new report uses 2011 figures, from the top five countries that represent more than 70 per cent of the creative sector in the EU (France, Germany, Italy, Spain, and the UK) and shows “negative evolution” with the destruction of 400,000 jobs, as well as the €20bn value destruction.

Dobusch says there's little doubt the study highlights the deterioration of creative industries in the EU. However, it also shows that the three activities within the creative industry with the heaviest losses were the architectural, engineering and wired telecommunication sectors – none of which is affected to any great extent by piracy.

By contrast, the prof points out, the activities still thriving (according to the 68-page report) are television programming and broadcasting and motion picture, video and television programme production.

So is piracy responsible for all those job losses? As far as Dobusch is concerned, the jury is still out. ®

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