Potential $600M annual economic boost from copyright reform

Australia’s copyright regime is currently holding back innovation, but making copyright more flexible and technology-neutral will, over time, add $600m in annual productivity gains to the economy.

These findings are contained in two new reports prepared by Lateral Economics for the Australian Digital Alliance.

“The reports, Exceptional Industries and Excepting the Future, calculate for the first time the value of the ‘copyright exceptions sector’ and value it at $182 billion dollars per annum, or 14% of Australia’s GDP” according to Dr Nicholas Gruen, who authored the reports with Professor John Houghton.

“We have identified how Australia's outdated copyright laws create a legal environment that is less conducive to innovation and investment than comparable countries for services such as web hosts, search engines and social media” explained Dr Gruen.

Copyright ‘exceptions’ are vital to Australia’s cultural, technological and economic activity. Exceptions allow people to, for example, shift their music from CD to mp3 so that they can use an iPod. The ‘copyright exceptions sector’ includes education and research institutions, libraries and cultural institutions, digital, internet and web hosting providers as well as producers of copyright enabling devices such as mp3 players.

“What the reports clearly show is that more flexible, technology-neutral copyright laws would make a substantial contribution to Australia's economic growth and innovation with negligible downsides for content owners. We conservatively estimate the value added to Australia’s economy from higher productivity in the copyright exceptions sector could reach around $600 million per annum” Dr Gruen stated.

Australia’s current copyright regime fosters risk and uncertainty and has a negative impact on investment and innovation.

Increased risk of litigation: The reports found that Australia’s tightly defined exceptions are relatively frequently contested in the courts. With rapid technological change, laws that are too prescriptive create continual uncertainty as to whether new innovations are allowed:

  • Negative impact on investment: the reports found that investors would value the reduced risk and uncertainty from more flexible copyright exceptions at around $2 billion a year.
  • Negative impact on innovation: the Australian copyright regime is one of the key conditions for investment and innovation. With inadequate and inflexible copyright 'exceptions' and with ‘safe harbour’ protections extending only to carriage providers like telcos, there is far more copyright risk to online services in Australia than in comparable countries with more flexible copyright laws.

“These reports by Lateral Economics make it clear that in Australia, companies like Apple, Facebook and YouTube are exposed to a greater risk of liability for copyright violations. This means that Australia is not a natural home for innovation and it reduces our ability to compete globally” said Derek Whitehead, Chair of the Australian Digital Alliance, the publisher of the reports.

Find the reports at: www.digital.org.au/content/LateralEconomicsReports.

For more information about the reports or to schedule an interview please contact:

  • Dr Nicholas Gruen, CEO of Lateral Economics

ngruen@lateraleconomics.com.au | (03) 9646 0553 | 0403 077 732 | www.lateraleconomics.com.au/

  • Derek Whitehead, Chair of the Australian Digital Alliance

dwhitehead@groupwise.swin.edu.au | (03) 9214 8333  | 0412 996 025 | www.digital.org.au

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