Ever since my years in Silicon Valley, I’ve been fascinated by “business clusters,” regional locations where a critical mass of skills, technology, capital, and other factors combine to create world-leading expertise in a specific product, service, market or technology. For the hearing aid business, the area surrounding Copenhagen is one such cluster, home to three of the world’s five top hearing aid manufacturers.
So here’s my question: Is Denmark the “Silicon Valley of Sound”? Or is it Minnesota, home to Starkey Laboratories, another of the big five and a regional center that has spun off and still supports multiple hearing aid and hearing technology companies? Or perhaps it is Northern New Jersey, another U.S. location where multiple global hearing aid companies have set up shop.
The question hit me this past weekend as we explored the upscale Central West End in St. Louis and wandered into 10denza, a fashion-forward retail outlet “where pop culture, modern city style, music and media converge.” My wife Barbara and I were immediately drawn to a display of fashionable headphones and ear buds. There was some funky hip-hop head ware, but two understated products from Danish manufacturer AIAIAI caught my eye. The ear buds were sleek but simple, and the lightweight Tracks headphones were minimalist to the extreme. When Barbara tried them out, the sound quality blew her away. Sure enough, when I looked at the fine print on the Apple-quality packaging, I saw they were designed in Denmark.
AIAIAI’s web site provides as good a definition of a business/design cluster as any academic treatise I’ve read on the subject:
Headquartered in Copenhagen, AIAIAI is proud to contribute to Denmark’s worldwide reputation as leader in acoustic and electro- acoustic design and engineering. Informed by a heritage of Scandinavian design, AIAIAI strives to create high quality, accessible audio products that deliver value far beyond trend-driven aesthetics. AIAIAI boasts a world-renowned network of industrial designers, audio technicians and DJs as part of its unique and highly collaborative development process. Exploratory and experimental, the process enables AIAIAI to develop new products on the leading edge, independent of current market trends.
Here we have a small, high-tech, high-fashion product designer based in Copenhagen extolling the virtues of Denmark’s leadership in acoustic and electro-acoustic design and engineering, something that springs directly from the local hearing aid industry. It’s a perfect example of the combination of creativity and product quality that bubbles up from the entrepreneurial cauldron of a successful business cluster. The picture of their design studio made me think of Frog Design, the small Silicon Valley studio that Steve Jobs and Apple put on the map years ago. The key is the phrase “delivering value beyond trend-driven esthetics.” Making a beautiful form convey superior function is what great design is all about, and you can’t get there unless it’s based on great technology.
The three Danish hearing aid companies driving the audio technology innovation are Widex, a venerable family-owned hearing aid company; the William Demant Holding Group, parent of Oticon and Bernafon hearing-aid brands as well as the Sennheiser high-tech headphone manufacturer; and GN Store Nord, parent of global hearing aid manufacturer GN ReSound and headset manufacturer GN Netcom, maker of the popular Jabra Bluetooth headsets and other consumer-tech audio products. Together they have created a critical mass of expertise in sound engineering that is starting to drive the regional economy along with the success of consumer electronics companies like AIAIAI and another well-known high-end consumer audio company, Bang & Olufsen.
Are there other regions around the world worthy of wearing the “Silicon Valley of Sound” crown? Minnesota, home to Starkey Laboratories and numerous other high-tech audio companies, is one. And Northern New Jersey is home to the U.S. headquarters of Siemens Hearing Instruments, to the U.S. operations of Oticon, and to the global sales and marketing operations of Panasonic Hearing Aids. In North America, where less than a third of the market of more than 35-million consumers who need hearing aids have purchased them so far, you may someday see such a boom in market demand that either of those locations will become the new Silicon Valley of Sound. And you can’t count out Stafa Switzerland, home of the largest hearing-aid manufacturing holding company in the world, Sonova Group, either.
For the time being, however, my vote is for Denmark as the official Silicon Valley of Sound. What’s yours?