Addressing the Counterfeit Goods Crisis

Comments Off on Addressing the Counterfeit Goods Crisis
Addressing the Counterfeit Goods Crisis

A new report titled The Economic Impacts of Counterfeiting and Piracy, estimates that by 2022, the global economic value of counterfeiting and piracy could reach US$2.8 trillion.  The report from Frontier Economics also provides estimates of the wider social and economic impact this activity will have in terms of displaced economic activity and investment, as well as tax losses and criminal enforcement implications.  It concludes that those additional costs could reach an estimated $1.9 trillion by 2022.

Taken together, the negative impacts of counterfeiting and piracy are projected to drain up to $4.7 trillion a year from the global economy and put 5.4 million legitimate jobs at risk by 2022.

“This new study shows that the magnitude of counterfeiting and piracy is huge, and growing,” said Amar Breckenridge, senior associate at Frontier Economics. “Our objective is to as accurately as possible characterize the magnitude and growth of this illegal underground economy and its impacts on governments and consumers. The results show once again that in an interconnected economy, consumers and governments suffer alongside legitimate businesses from the trade in counterfeit and pirated goods.”

Frontier’s analysis builds on a 2016 report published by the Organization for Economic Cooperation and Development (or OECD) and the European Union Intellectual Property Office.  That report focused on the value of the international trade in counterfeit and pirated products. That study indicated an increase of more than 80% over the level found in the OECD’s ground-breaking 2008 report on the subject.

The scope of the new 2017 study was far larger.  Frontier attempted to estimate the direct and indirect impact of all production and trade in counterfeit goods worldwide.  Assuming nothing changes, the four broad categories and their yearly estimated economic impact in 2022, are as follows:

  1. Internationally traded counterfeit and pirated goods.                             Up to $991 billion
  2. Domestically produced and consumed counterfeit and pirated goods.  Up to $959 billion
  3. Digital piracy of movies, music, and software.                                       Up to $856 billion 
  4. Wider economic and social costs         Up to $1.88 trillion consisting the following:
  • Displacement of legitimate economic activity                        Up to $1.25 trillion
  • Reduction in foreign direct investment                                   Up to $231 billion
  • Government fiscal losses (e...

    To continue reading, become a paid subscriber for full access.
    Already a Trends Magazine subscriber? Login for full access now.

Subscribe for as low as $195/year

  • Get 12 months of Trends that will impact your business and your life
  • Gain access to the entire Trends Research Library
  • Optional Trends monthly CDs in addition to your On-Line access
  • Receive our exclusive "Trends Investor Forecast 2015" as a free online gift
  • If you do not like what you see, you can cancel anytime and receive a 100% full refund