In an updated report on the impact of global counterfeit goods and piracy, researchers are forecasting the dollar volume to rise to more than $2 trillion by 2022 from about $1.1 trillion when it was last measured in 2013.
The report was done by Frontier Economics with support from the International Chamber of Commerce and the International Trademark Association as well as technical support from data firm Tecxipio.
About half of the 2022 estimate is in pirated films, music and software. And China accounts for about 46 percent of all counterfeit and pirated goods, globally. Displacement of legitimate economic activity is forecast to be between $980 billion and $1.2 trillion by 2022.
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For apparel, leather goods, accessories, watches and other luxury items, the researchers said the displacement rates range from 46 to 60 percent. The report noted that the “amount of genuine activity displaced by counterfeits depends on the proportion of consumers that would purchase the genuine product if the counterfeit was unavailable.”
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“This report shows that the infiltration of counterfeit and pirated products, or IP theft, creates an enormous drain on the global economy — crowding out billions in legitimate economic activity and facilitating an ‘underground economy’ that deprives governments of revenues for vital public services, forces higher burdens on taxpayers, dislocates hundreds of thousands of legitimate jobs and exposes consumers to dangerous and ineffective products,” the researchers said in the 61-page dossier.
The report said there are “significant effects on the job market through the displacement of legitimate economic activity by counterfeiting and piracy.” Net job losses are estimated to be between 2 million and 2.6 million globally, and are pegged to rise to more than 4.2 million by 2020.
The report noted that the global counterfeit and piracy market is widespread, and shows no signs of retracting. “Counterfeiting and piracy are highly pervasive across countries and sectors, representing a multibillion-dollar industry globally that continues to grow,” the researchers stated. “Measuring the scale of counterfeiting and piracy helps us to understand the size of the problem, and the related social costs. It also helps inform policymakers so that they can target resources appropriately toward combating counterfeiting and piracy.”