The Business Software Alliance has published the results of its 2003 study on piracy conducted by technology research firm IDC.
It finds a software piracy rate in Ireland of 41%, compared with 37% in the EU.
The study estimates that pirated software costs software publishers in the EU more than €8 billion.
Julian McMenamin of BSA Ireland said the results showed that Ireland was failing to capitalise on the benefits that lower piracy rates could bring. He said even a 10% reduction in software piracy could lead to more than 2,400 new jobs and €236m in tax revenues by 2006.
There are nine EU countries with a lower piracy rate than Ireland - Austria, Belgium, Czech Republic, Denmark, Finland, Germany, Netherlands, Sweden and the UK.
Commenting on the results of the study, ICT Ireland's director Brendan Butler, said: 'Ireland's thriving software industry is being stymied in its development due to the level of illegal use of software at home and abroad.'