Internet Piracy and Entrepreneurial Growth

Abstract: Internet Piracy has become a phenomenon as a result of developed Internet technologies and file-sharing applications. With the growth of the Internet and the increased number of Internet users around the globe, the world is becoming ever more digitalized. Users are expecting digital information to be readily available at the touch of a button. This has caused an immense demand for digital goods, where piracy has been at the forefront of the file-sharing phenomena. Napster, KaZaA and Microsoft have all been negatively affected by Internet piracy. However, from the ashes of failed business ventures there has still been a demand by Internet users for accessible, cheap legal solutions in the realm of digital media. This has all spurred the advancement of new technological innovations, savvy entrepreneurship, and businesses that now reap the benefits of learning from others mistakes, re-organizing business models and changing the way business is done in the modern world even though Internet piracy remains rampant. This thesis proposes that Internet piracy is a main driver for Entrepreneurship in three ways: 1) through the creation of new ideas, 2) as a springboard for new businesses and 3) as a frontrunner of technological innovation. By examining three major cases (Napster, KaZaA and Microsoft in China) with the case study method and the economic theory of Supply and Demand; supported by interviews and survey questionnaires this thesis aims to answer the research question: Internet Piracy as a Steppingstone towards Technological Advancement and Entrepreneurial Growth? and three sub-questions; 1. Has the technology associated with Internet piracy supported the development of new technology used for legal business? 2. Does Internet piracy create new business models and business opportunities? 3. Is Internet piracy is becoming obsolete due to the availability of new legal versions of similar software and products? In short, the research proved that Internet piracy can be a steppingstone towards technological advancement and entrepreneurial growth. Sub-questions one and two proved to be true, while sub-question three left an open gap for further research and debate since there is not, in the foreseeable future, anyway to predict whether or not Internet piracy will devolve completely since what it offers is a free service, and it is hard to compete with free.