Can the Economic Costs of Counterfeiting and Piracy Be Accurately Calculated?

A new European study attempts to assess the impact of counterfeiting and piracy on the EU’s creative industries. Another report, however, says that it is difficult, if not impossible, to quantify the economic effects of counterfeiting and piracy.

The EU study, which was conducted by Paris-based TERA Consultants and commissioned by the International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy (BASCAP) initiative, defines Europe’s creative industries as “core” and “noncore.” Core creative industries include the music, film, television, software, publishing and advertising industries. Noncore creative industries are suppliers to and customers of the core creative industries. Noncore industries include those that manufacture or sell hardware, such as televisions or music-playing devices, as well as ancillary industries such as transportation.

The study illustrates the impact of the noncore industries by noting that the core creative industries in all EU countries generated €560 billion ($760 billion) in value added to gross domestic product (GDP) in 2008, approximately 4.5 percent of Europe’s GDP that year. The study found that the value added by the total creative industries (core plus noncore) was approximately €860 billion ($1.2 trillion) in the same year, or approximately 6.9 percent of GDP. In addition, in 2008 approximately 8.5 million people were employed in the core industries and 14 million in the noncore.

(To read the entire article, "Counterfeiting and Piracy: At What Cost?," from the July issue of Security Management, click here.)

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