Hi-tech Automotive Industry Investment Should be a No-brainer

Lost for words: What should the Australian government do, by way of industry support? Prop up a terminal car industry, or boost hi-tech companies with global sales potential?

Nuance Communications and Spanson Inc are two companies you’ve probably never even heard of. But if you’ve used Siri – the voice-activated assistant locked inside an iPhone 4S – you’ve used Nuance’s speech software. Nuance also sells the software for in-car entertainment and navigation systems.

Spanson makes NOR flash memory chips that make Nuance’s software work faster and enjoy larger lexicons. So the pair is in something of a symbiotic relationship.

Wouldn't investing in an industry like this make more sense for Australia than dumping hundreds of millions more taxpayer dollars into an industry on life support, with no real hope for the future?

These two US-based hi-tech firms are real success stories – especially Spanson, which went bankrupt in 2010 but earned $220 million in the fourth quarter of 2011 – about a third of that for its hi-tech flash memory. (For Trivial Pursuit champs: Spanson’s NOR memory reads randomly while the more conventional NAND flash memory in most electronics reads sequentially. It’s also more temperature tolerant. This means more words, faster.)

Spanson Chief Executive John Kispert said "We take our basic technology, we package it differently, we add microcontroller technology and we add algorithms to it so we can interface quickly with all the Nuance software."

The two fledgling tech companies are shopping their voice-recognition hardware/software packages globally to car companies now – a market with few upward limitations given the current push towards speech synthesis as a means of minimizing driver distractions. Wouldn't it be a neat trick if Australians did that?

Instead of throwing hundreds of millions of dollars on a declining Australian car industry – and, face facts, it’s never been sicker, nor will it recover – perhaps the Australian government should focus on smart, hi-tech Australian companies poised to offer equally smart technologies throughout the developed world. That could be a real support act to the mining boom – and it’s not as if there’s a shortage of brainpower down under.

One type of business has a potentially highly profitable upside. The other one is locked into a paradigm of extorting endless corporate welfare in the name of jobs.

Where would you put your tax dollars if you were betting on the future? Because that's exactly what the government is doing with that/your money.