Impacts on Governments and Jobs

A new study, conducted by Frontier Economics ( highlights the negative impact of counterfeiting and piracy on governments, taxpayers and consumers.

Across the G20 group of major economies alone, over €100 billion is lost each year due to lower tax revenues and higher spending on welfare, health services and crime prevention – depriving governments of revenues to stimulate economic growth and deliver vital public services. The findings also indicate that some 2.5 million jobs in G20 countries alone could be at risk due to counterfeiting and piracy.

Key findings from the report

  • Counterfeiting and piracy are estimated to cost G20 governments and consumers over €100 billion every year. The G20 economies lose approximately €62 billion in tax revenues and higher welfare spending, €20 billion in increased costs of crime, €14.5 billion in the economic cost of deaths resulting from counterfeiting and another €100 million for the additional cost of health services to treat injuries caused by dangerous fake products. Finally, a number of G20 economies may be missing out on higher FDI as a result of concerns over IPR enforcement. That lost investment could give rise to additional tax losses of more than €5 billion across the G20. It should be noted that these estimates are for the G20 countries, and only address a portion of economic damages governments and consumers may experience.
  • Counterfeiting also has a big impact on employment across the G20 economies. The analysis suggests that approximately 2.5 million jobs have been destroyed by counterfeiting and piracy – alternatively, if counterfeiting and piracy could be eradicated or seriously reduced, up to 2.5 million jobs could be created in the legitimate economies of the G20. It should also be noted that these estimates do not include secondary impacts on employment that may well be experienced by suppliers, retailers and other sectors in the supply chain.
  • While it is likely that many of those who lost their jobs have gone on to find reemployment, the personal and family trauma associated with even temporary unemployment should not be lightly discounted. For example, people may quickly get into arrears on mortgages or personal debts, have difficulty paying medical expenses (as benefits are often linked to employment) or be forced to relocate to find alternative employment. Even when workers do find new jobs, they are likely to pay less. Moreover, our estimates suggest that 160,000 workers will fail to find new jobs, with devastating consequences for their personal financial situations and harmful consequences for government as welfare bills rise and taxes fall.