Strategic CIO // Executive Insights & Innovation
Commentary
5/25/2010
02:21 PM
Bob Evans
Bob Evans
Commentary
Connect Directly
RSS
E-Mail
50%
50%

Microsoft Says China Piracy Killing Thousands Of U.S. Jobs

Insisting that software piracy in China has become so pervasive that "there is no software market to speak of" in the fast-growing country, Microsoft CEO Steve Ballmer said yesterday that enhanced enforcement in China of intellectual-property rules could save U.S. firms tens of thousands of jobs, Bloomberg reports.

Insisting that software piracy in China has become so pervasive that "there is no software market to speak of" in the fast-growing country, Microsoft CEO Steve Ballmer said yesterday that enhanced enforcement in China of intellectual-property rules could save U.S. firms tens of thousands of jobs, Bloomberg reports.From a news article in Bloomberg BusinessWeek:

China's trade surplus with the U.S. widened in March, fuelling concern the yuan has been kept undervalued to support Chinese exports.

Better enforcement of intellectual property rules could save U.S. firms tens of thousands of jobs, Ballmer said.

"If the U.S. is going to export to Asia, it's going to export IP, whether it's in pharmaceuticals, technology," Ballmer said. "Otherwise the U.S. will have nothing to export."

Ballmer illustrated his point with this striking comparison: while India and South Korea both have large and growing economies, Ballmer said, China's gross domestic product is twice as large as both companies' GDPs combined. Yet Microsoft generates more revenue in each of those countries as it does in China, he said, before adding Indonesia as another country with better prospects for Microsoft than China.

"India is not perfect but the intellectual property protection in India is far, far better than it would be in China," the head of the world's largest software maker said in an interview in Hanoi, Vietnam, yesterday. "China is a less interesting market to us than India, than Indonesia."

Ballmer's broadside against Chinese piracy and its devastating impact on the software industry is reminiscent of equally scathing remarks made last year by Microsoft chairman Bill Gates in a Q&A session with computer-science students at Carnegie Mellon University (you can read the detailed account at Global CIO: Bill Gates Blasts China Over Corporate Software Policy). Here's an excerpt from Gates' comments on Chinese software piracy:

"What's unique to China is you have large businesses using software without paying for it. SUPER-profitable big businesses [he chuckles]. Take two of the five most-profitable businesses in China: they don't pay for their software.

"So that's a case where the Chinese have done something quite unique [he chuckles again; huge laughter and applause from audience]. But, I'm not complaining about it-I'm, you know, a big fan of China [big smile from Gates; big laugh from the audience], and a lot of great things are going on there [another big smile, and more audience laughter and applause], but, y'know, we've all got things to work on."

Meanwhile, from the Bloomberg piece, here's a comment from an official in the Chinese government about allegations of rampant software piracy in his country: "China's effort at strengthening protection of intellectual property is universally recognized."

"Universally recognized?" Right-but only if Steve Ballmer and Bill Gates are operating in alternative universes.

RECOMMENDED READING:

Global CIO: Bill Gates Blasts China Over Corporate Software Policy

Comment  | 
Print  | 
More Insights
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Must Reads Oct. 21, 2014
InformationWeek's new Must Reads is a compendium of our best recent coverage of digital strategy. Learn why you should learn to embrace DevOps, how to avoid roadblocks for digital projects, what the five steps to API management are, and more.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
A roundup of the top stories and trends on InformationWeek.com
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.