According to a new survey 65 per cent of the software used in the Republic is pirated and the Irish information technology sector is losing £33.5 million annually as a result.
The Irish rate of software piracy is 26 per cent higher than the estimated European average, according to the survey prepared by the International Planning Research Corporation for the Business Software Alliance (BSA) and the Software Publishers Association.
BSA, which represents the main software development companies in Ireland, says if piracy was reduced by 27 per cent then 2,773 new jobs could be created, with total turnover in the Irish IT sector increasing to £438 million.
Greece was the only European State to have a higher rate of piracy than the Republic.
Falls in piracy rates in many European states have been offset by an increase in the number of software applications in use, according to the survey.
"Many large software companies based in the Republic are very unhappy with the level of piracy," said a spokeswoman for the BSA.
Despite the high levels, the rate has dropped 5 per cent since 1996. Internationally, software piracy rates are showing a tendency to fall, with a drop of 3 per cent recorded last year.
Globally software piracy is estimated to cost companies £8.1 billion.
Piracy involves the unauthorised use or illegal copying of a software product, says the survey.
"It occurs in a number of forms, including the sharing of floppy disks, mismanagement of network software licences, the production of counterfeit CD-ROMS and piracy via the Internet," it adds.
"Not only is the Irish piracy rate more than twice that of Britain, but even Eastern European countries like the Czech Republic and Latin American nations such as Colombia return far lower piracy rates," said Ms Emilia Knight, vice-president of BSA Europe.
"We are seriously concerned that a country which has designed its economic future around the IT industry can also disregard to such an extent the value of the products which are providing thousands of its people with their jobs," she added.
The BSA says not a single person has been convicted in the Republic for software piracy. "It has been almost impossible to bring a case up to this point," said the spokeswoman.
She added however that the new Copyright Amendment Bill 1998, introduced by the Minister for Labour, Trade and Consumer Affairs, Mr Kitt, will significantly improve the situation.
The Bill provides for new stringent penalties for breaches of copyright law of up to £100,000 or five years in prison.
"The bill will also make it easier to prove copyright ownership in civil cases," according to the BSA.
