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

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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 the United States Outpaced Japan in Software Innovation

In the 1980s, Japan was America’s chief rival in most technology industries. Not only could Japanese firms compete in advanced sectors against U.S. firms, they had an innovation advantage.  In fact, research and design (R&D) investments in Japan were 40 percent more productive in producing IT patents than were R&D investments in the United States, implying that Japanese firms were better able to make advancements into developing better good, products, and processes.

However, in the 1990s this trend reversed. U.S. firms, while less innovative in hardware manufacturing, developed an innovation advantage in software, with R&D spending yielding 60 percent more patents per dollar spent in the United States than in Japan.  A recent paper by Ashish Arora, Lee G. Branstette, and Matej Drev explains why.

Software represented a new frontier for an industry that had previously focused on producing hardware such as semiconductor, televisions, computers, and other advanced machinery. High-tech firms adjusted rapidly to the new challenge, and innovations quickly built on previous innovations, and an IT patent filed in 2002 was 10 times more likely to cite a software patent than one filed in 1992.

Advanced technology industries in

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Software Quality

My friend David Black posts a fine piece here about software quality.  It includes a wonderful cartoon that anyone who has been in the business of creating software will deeply appreciate.

Enjoy, and don’t forget to share your thoughts.

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More on Software Factories

In response to my blog on Software Factories a young commentator wrote me:


I think the thesis is spot on, with the caveat that another axis of value–besides cheaply and quickly produced–is quality.  Programming without errors is very hard.  Most domains are actually pretty tolerant of errors.  But I think there’s an opening for ‘premium quality’ software.  Galois Inc., by all accounts, is an example of this.

I would also like to see some examples.  The idea of software factories isn’t one that needs anything other than market forces to get off the ground.  So I think the burden is on [Dan Gordon] to prove: a) why such factories don’t exist yet, given the claimed advantages, and b) why doesn’t he go into that business and rake it in?

Final point: It seems like the people who write the dsl’s would have to know quite a bit about the domain they’re writing their dsl for, which would sort of obviate the benefits of breaking up the labor like that.  Language design is notoriously hard, especially when you won’t actually be using the language you write.

Final final point:  Lisp’s

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