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Innovation Fact of the Week: Commercial Value of Illegally Installed PC Software Totaled Nearly $63B Globally in 2013

(Ed Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

The global market for PC software is huge, but 43 percent of all PC programs that individuals and businesses installed in 2013 were not properly licensed, according to the BSA Global Software Survey. The commercial value of those illegal installations was $62.7 billion that year, up from $47.8 billion in 2007 when the illegal rate was 38 percent.

The United States has the world’s lowest rate of unlicensed software use (18 percent in 2013), but it is such a large market that the commercial value of those illegal installations is the world’s highest at $9.7 billion. In China, by contrast, 77 percent of all PC software installations were illegal in 2013, with a commercial value of $8.9 billion, the world’s second-highest total.

By region, the average rate of unlicensed software use was 59 percent or higher in Latin America, Central and Eastern Europe, the Middle East and Africa, and the Asia-Pacific region. That compared to 19 percent in North America and 29 percent

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How Did Data Privacy Day Go From #PrivacyAware to #PrivacyScare?

Today is Data Privacy Day, an annual reminder to all of us to check our digital zippers. But while Data Privacy Day was originally devoted to educating consumers about how to protect their data online, in recent years it has become better known for the privacy activists who participate in such rowdy traditions as midnight Twitter rants and feats of endurance like “Who can sound the shrillest?” The kids might even get swept up in the festivities and help their parents build tin-foil hats.

Some years back privacy activists realized that Data Privacy Day was a perfect opportunity to further peddle their stories of a coming digital apocalypse brought about by Big Brother and Big Data. And faster than you can say “fundraising bonanza,” Data Privacy Day morphed from an attempt to improve people’s cyber hygiene to the activist-fueled orgy of fear, where everyone is invited and tips are appreciated.

Unfortunately, many people have fallen victim to these tales of doom.  While we’ve seen this before—the great grandparents of today’s privacy activists were decrying Kodak for inventing the portable camera—privacy activism has reached new heights and now

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AI

Artificial Intelligence and Robotics Poised to Destroy All Jobs but One

In the last few years a growing number of techno-futurists, like venture capitalist Vinod Khosla, former software executive Vivek Wadhwa, MIT professor Erik Brynjolfsson, and author Martin Ford have all asserted that advancing technologies like machine learning and robotics will destroy jobs. Khosla for example, recently stated that “machine learning will replace most jobs.” But they and others clearly “don’t get it” and are doing a real disservice to the public by sugarcoating the future.

Never mind that we have been automating work for hundreds of years and employment has kept expanding. This time, everything is different. In fact, these new technologies are so awesome and amazing that they won’t replace most jobs; they will replace all jobs, save one. That job will be held by Zhang Wei, who is now a 15-year-old boy studying computer science at his local high school in Nanjing, China. He will invent the best artificial intelligence system ever and then run the company that puts all other companies out of business. His technology (an AI robot more powerful than Asimov’s Daneel) will be so good that it will do

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Privacy Panic Cycle.

Pew Survey Offers Further Evidence of the Privacy Panic Cycle

The Pew Research Center released a survey last week that investigated the circumstances under which many U.S. citizens would share their personal information in return for getting something of perceived value. In the survey, Pew set up six hypothetical scenarios about different technologies—including office surveillance cameras, health data, retail loyalty cards, auto insurance, social media, and smart thermostats—and asked respondents whether the tradeoff they were offered for sharing their personal information was acceptable.

To be sure, some of the questions that Pew asked described one-sided tradeoffs that could have tainted the findings. Nevertheless, the overall results reveal that the Privacy Panic Cycle, the usual trajectory of public fear followed by widespread acceptance that often accompanies new technologies, is still going strong for many technologies.

The Privacy Panic Cycle explains how privacy concerns about new technologies flare up in the early years, but over time as people use, understand, and grow accustomed to these technologies, the concerns recede. For example, when the first portable Kodak camera first came out, it caused a big privacy panic, but today most people carry around phones in their pockets and do not give

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8 Reasons Why Countries Need a National Internet of Things Strategy

The Internet of Things offers many opportunities to grow the economy and improve quality of life. Just as the public sector was instrumental in enabling the development and deployment of the Internet, it should play a similar role in the Internet of Things to ensure its success.

Here are the eight reasons why national governments should create comprehensive national strategies for the Internet of Things:

  1. Network externalities

Many of the social and economic benefits from large-scale deployment of the Internet of Things accrue not to those buying or selling these products and services, but to competitors—through the expansion of network benefits—and to non-users, if the application generates an external benefit. Government efforts can help correct these market failures so that consumers and businesses can seize the full set of benefits.

  1. “Chicken-and-egg” dynamics

The success of some Internet of Things applications depends on the success of other technologies and vice versa. While the market will eventually be able to establish effective interdependent systems, it would take longer and happen much more incrementally than it would with government support to resolve chicken-and-egg dilemmas and encourage mutual adoption of these technologies until

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Devices are becoming increasingly common in classrooms.

EFF Accelerates the Privacy Panic Cycle for EdTech

Earlier this month, the Electronic Frontier Foundation (EFF) launched a “Spying on Students” campaign to convince parents that school-supplied electronic devices and software present significant privacy risks for their children. This campaign highlights a phenomenon known as the privacy panic cycle, where advocacy groups make increasingly alarmist claims about the privacy implications of a new technology, until these fears spread through the news media to policymakers and the public, causing a panic before cooler heads prevail, and people eventually come to understand and appreciate innovative new products and services.

When it comes to privacy, EFF has a history of such histrionics. The organization has accused desktop printers of violating human rights, spread misinformation about the effectiveness of CCTV cameras, escalated confrontations around the purported abuse of RFID, cried foul over online behavioral advertising, and much more. These claims, even if overblown and ultimately disproved by experience, generate headlines and allow EFF to spread fear, ploughing the ground for harmful regulation or even technology bans.

EFF’s newly launched “Spying on Students” campaign is yet another example of this tendency to put fear ahead of fact. EFF

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Whining Whiners and the Whines They Tell: Ad Blocker Edition

Earlier this week a number of Yahoo Mail users took to social media and online forums to announce that, as a result of recent actions by the company, they were henceforth refusing to use the service. You might wonder what transgression would be so serious that it would cause users to abandon their preferred email platform. Was Yahoo secretly using child labor to run its cloud services? Did the company announce plans to open offices in North Korea? No, Yahoo’s sin was significantly worse—the company told users of its free webmail service that they had to stop using ad blockers to continue using its service.

For those who are uninitiated, ad-blockers are web browser plug-ins that do exactly what their name suggests—block online ads from displaying on a website. Users install these plug-ins because it allows them to view websites without the indignity of seeing ads. As you have surely surmised, this is truly an outrage. How dare a company expect its users to view ads on its free, ad-supported email service? This would be like a restaurant expecting its customers to pay the prices listed on its menu for

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Three Big Things ‘Back to the Future’ Got Right (Thanks to Government)

Today is the day that Michael J. Fox’s iconic character Marty McFly landed in a future that Hollywood imagined almost 30 years ago in Back to the Future II. It turns out that many of the amazing things McFly saw in the movie have indeed come to pass—from 3D video to wearable technology.

But in celebrating our technological advancements, it is important to remember that none of these innovations happened by chance. They are the product of an enormous amount of investment in research and development—much of it seeded by the federal government. Since today also is the day that the White House is releasing the third iteration of its national “Strategy for American Innovation,” here are three prime examples:

Tablets and Other Smart Devices

The tablet computing props in Back to the Future II accurately predicted the miniaturization of electronic devices in recent years. The parallels between the movie and modern society’s use of tablets seem uncanny: from the way Marty’s nemesis Biff paid a taxi fare with his thumb print to the way policemen in the movie used a tablet computer to check the identity

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Solving the Transatlantic Data Conundrum

From the Snowden revelations to the collapse of the Safe Harbor, transatlantic data sharing has gotten significantly more complicated over the past few years. The primary problem is that the underlying policies supporting the digital economy are showing their age, and this framework is sorely in need of updating to match today’s globally-connected economy. Without modernizing these policies, U.S. tech companies stand to lose more than $35 billion and digital free trade will suffer as countries erect restrictions on cross-border data flows.

We need a renewed transatlantic dialogue on solutions to these problems. ITIF has proposed many ideas to solve this issue including:

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Bridging the Infrastructure Divides

In an era of inflated political passions, where is the pragmatic center when it comes to comparatively dull issues like infrastructure? That was a key question up for discussion last week at an event where I had the pleasure of speaking as a panelist. Hosted by the Carnegie Endowment for International Peace, and supported generously by Bernard L. Schwartz, the event focused on job creation and infrastructure policy, featuring speakers such as Vice President Joe Biden, Senators Chris Coons and Mark Warner, and a host of other policy leaders and experts.

The central theme of the event was the critical need for increased public and private investment in infrastructure, including not just traditional physical infrastructure, but also new digital-physical hybrid infrastructure, such as smart highways and bridges. In addition, the event sought to identify effective policies that might have a reasonable chance of bipartisan support.

One issue that repeatedly came up was how it can be possible, given the major infrastructure challenges facing America, that there is not more support for infrastructure funding. Some argued it is time to make infrastructure “sexy.” Others said we need to make it

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