Research Policy 36 (2007) 88–106

The innovative behaviour of tourism firms—Comparative studies of Denmark and Spain
Jon Sundbo a,∗ , Francina Orfila-Sintes b , Flemming Sørensen c
b a Department of Social Sciences, Roskilde University, Denmark Department of Business Administration, University of The Balearic Islands, Spain c Ceus School of Business, Nykøbing F., Denmark

Received 1 November 2005; accepted 28 August 2006 Available online 31 October 2006

Abstract Tourism firms operate in a competitive sector where innovating is often a condition for survival. This article presents a theoretical framework for understanding tourist firms’ innovative behaviour and innovation systems in tourism. The innovativeness of tourism firms and its determinants are investigated by analysing quantitative as well as qualitative data comparing Spain and Denmark. A taxonomy of tourism firms is suggested and the firms’ characteristics which influence their innovativeness are presented. Additionally, the role of innovation networks is discussed, as is the role of innovation systems. The article suggests that large size, professionalism, but also entrepreneurship among small tourism firms are important determinants of innovation. Varied innovation networks are another determinant as are supportive innovation systems. These determinants favour Spanish firms, which are more innovative than Danish ones. In the final section, policy recommendations are presented. © 2006 Elsevier B.V. All rights reserved.
Keywords: Innovation; Network; Innovation system; Tourism

1. Introduction Tourism firms operate in an extremely competitive sector which is characterised by continuous transformation (Wahab and Cooper, 2001). Therefore, tourism firms’ competitiveness depends on their innovativeness in achieving lower costs and higher quality outputs that meet the demand requirements of potential customers, and which introduce new products (e.g., improved services and products, individualisation, environmental issues and ICT interaction). Nonetheless, research on innovation in tourism has been limited. The research

Corresponding author. Tel.: +45 46742161; fax: +45 46743081. E-mail address: (J. Sundbo).

that does exist concludes that tourism firms are in most cases only moderately – if at all – innovative (Hjalager, 2002), examples of this being Danish tourism firms (Jensen et al., 2001) and British coastal resorts (Shaw and Williams, 1998). However, there is a great deal of diversity between countries (Per´ z and Llaudes, 2001) e and, for example, a number of Spanish destinations have significantly improved and diversified their products (Fayos-Sol´ and Bueno, 2001; Per´ z and Llaudes, a e 2001). Thus, the research leaves one with the impression that tourism firms are, generally speaking, moderately innovative, but with some important exceptions, which indicates that there is potential for a higher degree of innovativeness in tourism. However, which firms are innovative and which are not is not known, nor is the explanation for these differences.

0048-7333/$ – see front matter © 2006 Elsevier B.V. All rights reserved. doi:10.1016/j.respol.2006.08.004

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The aim of this article is to provide a more detailed picture of the differences in the innovativeness of tourism firms and to provide an understanding of these differences. This is done on the basis of a general discussion of models of innovation systems. This discussion leads to a three-level analysis: at the level of the firm, the innovative behaviour and management of tourism firms will be analysed, at the network level, the tourism firms’ cooperation with other firms will be considered, and at the system level, the role of innovation systems (Nelson, 1993) will be discussed. In this way, a broad array of factors are included and considered. The dominate theories of innovation as being of general importance for different productive sectors’ innovativeness – are included and considered in the analysis. The analysis is based on qualitative and quantitative data from Spain and Denmark mainly relating to different tourist destinations within those countries. The data are used to generate a general understanding of the innovative behaviour of tourism firms. However, the data concerning the two countries and their destinations are also applied in a comparative manner so as to discuss geographical differences. Thus, the article uses different methods (quantitative and qualitative) as well as perspectives (geographical, sociological and managerial) in order to analyse and explain the innovative behaviour of tourism firms. 2. Innovation theory and tourism The intention here is to study and understand tourism firms’ innovation behaviour. This can be done by studying the behaviour of the individual firm at a micro level – an organisational approach (cf. Coriat and Weinstein, 2002). However, the innovation research tradition’s institutionalist approach has emphasised the coordination of the behaviour of the individual firms and the external influence as important factors too, often called innovation systems (cf. Coriat and Weinstein, 2002). Both approaches are relevant to understanding innovation in the tourist sector and our empirical analysis of innovation in tourism will be placed in such a general theoretical framework. Thus we can give a broader and more general interpretation of the results and which possible policy consequences we can draw. We will start by discussing which general theoretical approach and model is most adequate. We will discuss this based on the assumption that tourism is a service industry and thus the characteristics of service innovations and service innovation systems can be applied to tourism. We will also put this discussion into perspective by referring to general models of systems of innovation and the arguments for and against the different models. After this general discus-

sion, we will construct the levels of innovation behaviour systems that are most adequate for our empirical analysis. 2.1. A general theoretical framework for innovation in tourism Several models of innovation systems have been presented ranging from national or regional systems (e.g. Nelson, 1993; Oinas and Malecki, 1999) to more sector specific ones (e.g. Pavitt, 1984; Miozzo and Soete, 2001; H˚ kansson and Ford, 2002). They have mostly a been developed from studies of manufacturing industries. Studies have demonstrated that innovation in services follows patterns that are to some degree different from those in manufacturing (e.g. Sundbo, 1998; SIC, 1999; Metcalfe and Miles, 2000; Andersen et al., 2000; Gallouj, 2002; Van den Aa and Elfring, 2002; Coombs, 1999a,b; Drejer, 2004; Howells, 2004, 2006). One of the main results shows that traditionally speaking innovation in services is not technological, but consists of a change of behaviour (e.g. Sundbo, 1998). Service is social behaviour and the personal interaction between the user and the service provider is the core of the definition of service and, thus, the explanation of service firms’ behaviour (cf. service management theory, e.g. Gr¨ nroos, 1990), including their innovative behaviour. o This means that the product and the process cannot be separated – the product is the process. On the other hand, it has been recognised that the service industry is increasingly dominated by technology, not least information technology (Miles, 1993; Miozzo and Soete, 2001), which means that a number of service innovations are technological. The products may be technological (such as a PDA tool that tells tourists about sights) and the processes may also be technology dominated (such as a PC system which has plans for serving meals for several hundred people). Nevertheless, these facts raise a discussion about the degree to which the models and frameworks that are mostly oriented towards explaining innovation in manufacturing sectors or technology based innovation processes can be applied to service industries such as tourism. There are two dimensions of this discussion. The first one is the understanding of services in relation to manufacturing and technology. Gallouj (2002, p. 1) introduces a continuum to describe this understanding. At the one end of the continuum is the service-oriented approach (e.g. Edvardsson et al., 2000) that sees services as something specific and different from manufacturing/technology, at the other end of the continuum is what Gallouj terms a technologist approach, which equates


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innovation in services with the introduction of new technology (e.g. Barras, 1990; Miozzo and Soete, 2001). In between is an integrative approach that emphasises the blurred boundaries between services and manufacturing and the integration of technology with human behaviour (e.g. Gallouj and Weinstein, 1997). The other dimension is related to the organisation–institution continuum that for example Coriat and Weinstein (2002) discuss. The issue here is to what degree institutional systems understood as a coherent set of factors and/or actors (as emphasised in Coriat and Weinstein’s discussion and, for example, in Callon et al.’s (1992) model) exist in service industries. On the basis of empirical studies, Sundbo and Gallouj (2000) claim that innovation systems are weak or non-existent in services. Pavitt (1984) and Miozzo and Soete (2001) state, on the basis of their “technologist approach”, that there are innovation systems in the service industry. We will seek to choose the most adequate theoretical approach to analyse and explain the empirical results about innovation in tourism. By adequate we mean the approach that most correctly explains the innovation processes in the tourism industry. The adequacy is decided on the strength of our and other researchers’ empirical analyses of innovation in tourism and from what we know about innovation in services in general. Based on these criteria we will suggest a theoretical framework that we will use in the development of a model for analysing tourism firms’ innovative behaviour. Concerning the first of the above mentioned dimensions, we will take an integrative approach, which sees innovations in tourism as behavioural and technological. Some innovations are purely behavioural and do not include technology, and could be called organisational innovations, however, this would not be the correct notion as some of them are changes of organisational structures or culture, but some are changes in individuals’ social behaviour. An example of the latter is a Viking ship museum where the guides start by telling narratives about how the Viking boats were found outside where the museum is now located and they show the places instead of producing written or IT-based information inside the museum. Other innovations are real technological ones such as introducing a web-net based ticket purchasing or reservation system for all kinds of tourism firms. Other innovations are a mixture, which could be called technology based. The innovation is a changed behaviour, but the new behaviour could not be carried out without new technology. An example is the change in the behaviour of a hotel receptionist who starts treating the customers individually (remembering their wishes concerning rooms, their careers, etc.). This innovation will

increase customer satisfaction and thus the willingness to pay a higher price, and return at a later date. This is a case of behavioural change on behalf of the receptionist. However, since receptionists change and cannot remember the personal data for thousands of customers, the new behaviour is based on a common PC-system where the personal key in the information about the customer as soon as they get it. Innovation in tourism can thus neither be reduced to the introduction of IT or other technology, nor can technology by excluded. Innovation in the empirical analysis thus refers to both behavioural as well as technological innovation and will often be a mixture. Concerning the second dimension, we will base our understanding on the Sundbo and Gallouj (2000) approach, which has also been observed in tourism (Hjalager, 2000, 2002; Jensen et al., 2001; Jacob et al., 2004; Sørensen, 2004; Mattsson et al., 2006), namely that innovation systems are weak or even non-existent within tourism. This situation may be explained on the basis of a series of traditional factors of innovation, which in services generally and in tourism in particular are different from those known from, for example, manufacturing. One factor is imitation. Service innovations are easy to imitate (e.g. Sundbo, 1998; Boden and Miles, 2000) because they are simple, this is, among others reasons, because there is no advanced technology involved. Advanced technology is difficult to imitate as it is complicated. In tourism, the ease of imitation is even more pronounced as many innovations are hard to keep secret due to the nature of tourism and as most tourism innovations cannot be patented (Poon, 1993). Because of the ease at which innovations can be imitated, service firms, including tourist ones, keep the information about innovations and are less inclined to participate in networks such as those defined by Callon et al. (1992). The service firms become more competition than network oriented and thus believe more in their own capacity than in networking not to give competitors information. One might suggest that innovations in tourism require networks and co-operative systems. This may be argued from a destination perspective, where tourists come to a destination and the tourist firms are mutually dependent on developing common destination-innovations. However, empirical investigations, at least in Denmark, conclude that this is not the case (Hjalager, 2002; Sørensen, 2002; Bærenholdt et al., 2004; Mattsson et al., 2006). Tourist firms do not participate to any great extent in common destination-innovation, and tourists do not clearly see the destination as the place they visit. Thus, Callon et al.’s (1992) technology–economic network model can be used to introduce some elements that could be included in a model of tourism innovation.

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However, not all aspects of their model are relevant to the tourism industry. This is because service firms (and tourism firms in particular; Hjalager, 2002) undertake very little research or have relations to external research institutions (Sundbo, 1998; Boden and Miles, 2000; SIC, 1999; Howells, 2004, 2006). They are much more market oriented, thus this aspect of Callon et al.’s model is applicable. This also means that service firms’ innovation behaviour is very often not systematic and external actors play a minor role. The situation may suggest that both Pavitt’s (1984) as well as Miozzo and Soete’s (2001) models only cover part of service innovations since they both emphasise technological innovations. Miozzo and Soete provide a more adequate model than Pavitt because they have more variants of the technological innovation system and they stress an increased use of technology in services that also characterises parts of the tourism industry (e.g. hotels; Lattin, 1990). Studies of general service innovations and studies of tourism innovations have presented examples of concrete innovations as well as descriptions of innovation systems (Sundbo, 1998; Haukness, 1998; SIC, 1999; Howelles and Tether, 2004; Hjalager, 2000; Jensen et al., 2001; Mattsson et al., 2006; Orfila-Sintes et al., 2005; Sørensen, 2004; Jacob et al., 2004). Innovations follow many patterns and are of many kinds – often not technological – and it is difficult to point to one category of taxonomy such as those launched by Pavitt and Miozzo and Soete should be an adequate description of the total tourist industry’s innovation behaviour. Sundbo and Gallouj’s (2000) model provides a broader and more open view of innovation systems, which may be more adequate when explaining the situation in tourism. Although they argue that innovation systems are weak, they also argue that service firms are influenced by external factors. They divide these factors into actors (cf. Callon et al., 1992) and trajectories (cf. Dosi, 1982). A series of actors and trajectories influence the innovation process in services firms, but they are loosely coupled and might not be termed a system. Other factors influence the situation in tourism as well. The skill of the labour force in the industry is low (Jensen et al., 2001) and labour turnover is high (Hjalager, 2002), which means that the absorptive capacity of external information (research results, knowledge about new technology, etc.) is low in the industry. Only the largest firms have personnel with a high capability to absorb external knowledge via the knowledge trajectories. Only they may be supposed to have the capacity to develop more complex and advanced innovations. Small tourism firms may have relations to many actors; however, it is reasonable to suppose that these relations may not open up the possibility for innovation-oriented

knowledge. The small firms will keep their secrets so as not to give competitors the opportunity to imitate their ideas. Only entrepreneurs may be supposed to be able to procure adequate knowledge and utilise the actor network progressively to develop many advanced innovations. The theoretical considerations outlined above must, of course, be applied to the empirical situation of the tourist industry to demonstrate their adequacy, which will be done in the empirical part of the article. It is still an open question how much the system or institutional factors exist in tourism. It is also an open question as to what degree increased systematisation or institutionalisation will lead to more innovation. In fact, we intend in the empirical part of the article to demonstrate that the tourist industry in Spain has become more institutionalised (in the sense of Coriat and Weinstein, 2002), and that this has lead to a larger degree of innovativeness. 2.2. An innovation model of three levels in the tourist industry On the basis of the above discussion we now turn to presenting a three-level model that can be used to analyse and understand innovation in the tourist industry. Our three levels are inspired by Coriat and Weinstein’s (2002) dimension of “organisation–institution”. However, our approach follows Sundbo and Gallouj’s (2000) suggestion that service (in this case tourist) firms’ innovation activities are only loosely coupled to the external world. We therefore define the three levels being careful to not too substantially assume that innovation systems exist in the tourism industry. The three levels are: (1) the level of the firm, which relates to Coriat and Weinstein’s conception of the organisational level; (2) the level of the network, which characterises more loosely coupled external relations that may be important for the individual firm, but which not are so cohesive and deterministic that they can be called an institutionalised system; (3) the systems level, which relates to Coriat and Weinstein’s notion of institutionalisation. In the following we will explain these three levels in detail and discuss them in relation to tourism. The model will form the basis for the empirical analysis. In the conclusion, the implications of this analysis will be related to the more general theoretical framework discussed above. 2.2.1. Innovation at the level of the firm At the firm level, innovation has traditionally been attributed to the imagination of individuals and to R&D carried out within individual firms. Schumpeter (1961) emphasised the role of imaginative individuals pro-


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ducing ideas and introducing them into economic life: the entrepreneur. However, Schumpeter (1947) later acknowledged that innovations were primarily the result of organised firm-internal activities and were the domain of large monopolistic or oligopolistic firms, which possessed the necessary resources. Within this tradition, the technology-push innovation theory, which was established later, considered science and R&D the central innovation determinants. Fischer (1999) can be considered as developing Schumpeter’s claims (Coombs et al., 1987). Alternatively, demand has been considered the pull-factor that has driven firms’ innovativeness (Schmookler, 1966). Innovation has lately been considered a market and strategy driven activity (e.g. von Hippel, 1988, 2005; Sundbo, 2001) These perspectives on innovation have survived in more or less modified forms and they have also influenced the considerations about innovativeness in tourism firms. As such, entrepreneurship in tourism has been studied (Morrison et al., 1999; Mattsson et al., 2006). However, entrepreneurship, understood in terms of the establishment of new firms on the basis of an innovation, is, compared with other business sectors, relatively unusual in tourism (Hancock and Bager, 2004). This lack of entrepreneurs in tourism firms has been related to these firms’ limited innovativeness (Shaw and Williams, 1994). Nevertheless, innovative tourism firms with entrepreneurial characteristics have been observed by other studies (Ateljevic and Doorne, 2000). Furthermore, larger tourism firms and in particular chain firms have generally been emphasised as being the main innovators in tourism (Hjalager, 2002). Innovativeness as the domain of mainly large firms has, as such, also been considered relevant in tourism: chains or business conglomerates provide greater knowledge about procedural and managerial innovations, technology, and other intangibles such as brand image and business reputation (Tremblay, 1998) which favour innovation in these firms (Morrison et al., 1999). Tourism firms have been considered as constituting a sector that is not itself involved in the stage of research (i.e., knowledge generation) for innovation as other organisations, such as suppliers, are responsible for research, and their activities facilitate the subsequent innovation processes in tourism firms (Hjalager, 2002). It has also been observed that service firms sometimes innovate in ways other than manufacturing firms on which innovation theories have traditionally been based. Innovation in services is more employee and customer based. The innovations are mostly incremental and based on practical experiences (Sundbo, 1998; Coombs, 1999a,b; Boden and Miles, 1999; Metcalfe and

Miles, 2000; Andersen et al., 2000; Gallouj, 2002). Service firms have traditionally not been as innovative as manufacturing firms, though they have become more innovative in the last decade (SIC, 1999). The sparse studies of innovation in tourism have shown that tourism firms’ innovative behaviour is in some ways similar to service firms’ behaviour although tourism firms have been seen to be generally even less innovative (Hjalager, 2002; Jensen et al., 2001). Orfila-Sintes et al. (2005) have analysed the innovative behaviour of hotels. Departing from the intersectorial differences that innovation presents, they first delimit innovation in service sectors. Then, the particularities of the hotels lead to a more concrete measure of the innovation in the hotel industry. The empirical results arising from the data on the Balearic hotel industry indicate an innovative behaviour that may be described as a diffusion process that is determined by internal characteristics such as the size, the star category, the chain, the management, the tour operators’ distribution and the differentiation strategy. Thus, traditional views on innovativeness have been considered relevant for tourism firms too, though these have so far mostly been superficial considerations. At the same time, it has been indicated that tourism firms do not necessarily innovate in exactly the same manner as firms in manufacturing industries. Finally, the above indicates that there are differences between whether and how different tourism firms innovate. All of these aspects will be considered in the empirical analysis, and different innovation determinants within tourism firms will be considered in greater depth. 2.2.2. Innovation at the network level In more recent innovation theory, it has been argued that networks are an important factor for innovation. Such networks correspond to ‘something in the middle’ of the organisation–institution dimension of Coriat and Weinstein. Networks consist of formal and informal relations among firms involved in the transfer of material and/or immaterial resources. They support innovations as they facilitate the transfer of information (Dyer and Singh, 1998), learning (Fischer, 1999) and the coordination of production and product development activities (Holmen et al., 2004). The structures of the networks are argued to be important for their innovative performance: dense and strong networks sustain stability, the transfer of ‘deeper’ specialist knowledge and incremental innovations, i.e. gradual changes of existing products and services, whereas less dense and weaker networks allow for more dynamism, the transfer of broad and general information and radical changes, i.e. the intro-

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duction of new products and services (H˚ kansson and a Ford, 2002; Rowley et al., 2000). Under most industrial circumstances, a combination of the two types of networks is necessary to ensure the innovativeness of firms (Rowley et al., 2000). In a spatial context, such innovation networks have been supposed to exist within agglomerations (industrial districts, innovative milieu, etc.) where they support the transfer of mainly specialist tacit knowledge through face-to-face contacts sustained by the spatial proximity between firms (e.g. Maskell and Malmberg, 1999; Coe and Townsend, 1998). However, such local networks are acknowledged to favour incremental innovations mainly (Capello, 1999; Grabher, 1993) and only in combination with non-local networks providing firms in agglomerations with external information and learning benefits, helping them to ‘stay tuned’ with what is going on in the surrounding world (e.g. Oinas and Malecki, 1999), can the full range of network benefits be achieved (Sørensen, 2004). In tourism, such networks may be both non-local and highly localised within tourist destinations (Milne and Ateljevic, 2001; Tremblay, 1998) and may, as such, combine the benefits of local and global networks. At the destination, such networks may be comprised of local relations among firms in the same branch of tourism, e.g. hotels (i.e. competitive relations); of relations among complementary firms, e.g. hotels and other tourism firms (i.e. complementary relations); and of relations with providers of inputs (i.e. input relations). Non-local networks, on the other hand, consist of chain relations; of relations among firms on destinations and their distributors, e.g. tour operators (i.e. distribution relations); and of relations with providers of inputs. Such different relations may provide different benefits depending on their structures and the actors involved (Tremblay, 1998; Sørensen, 2004). However, there has been a debate as to what degree local networks exist or non-local networks prevail among tourism firms (Sørensen, 2004), but this and their innovative benefits have received little empirical analysis. 2.2.3. Innovation at the system level Whereas innovation network theory focuses on relations among firms, the innovation systems theories draws into consideration a wider system supposedly affecting firms’ innovativeness and thus compares to Coriat and Weinstein’s institutionalisation. As such, the innovation system theories have the purpose of identifying all of the factors that influence innovation processes (Edquist, 1997, p. 17) including “all parts and aspects of the economic structure and the institutional setup affecting learning as well as searching and exploring”

(Lundvall, 1992, p. 12), e.g. firms, universities, research institutes, government agencies and policies, financial institutions, trade-unions, technical associations, etc. as well as broader social and cultural elements of society (Carlsson et al., 2002; Lundvall, 1992). Broadly speaking, two types of innovation system approaches – geographical and sectoral – can be distinguished in theoretical terms. Two geographical approaches have been dominant in the literature, namely that of the National Innovation System in which focus is on the nation-state (Nelson, 1993), and that of Regional Innovation Systems which recognises that within nation-states certain productive regions possess specific features affecting the innovativeness of such regions (Oinas and Malecki, 1999). The Sectoral Innovation System theory, on the other hand, focuses on specific sectors irrespective of their geographical extent (Edquist, 1997, p. 11). The agents of such a sectoral innovation system share a particular knowledge base, particular technologies, inputs and demands, learning processes, competencies, organisational structures, beliefs, objectives and behaviours (Malerba, 2002). Such national, regional and sectoral innovation systems may vary in composition, which is supposed to explain the differentiated innovativeness of firms belonging to different such systems. Tourism has been portrayed as a system which is both geographic and sectoral (e.g. Leiper, 1990). Such system approaches emphasise the multiplicity of actors involved in the process of providing tourism services and their interdependencies but do not see the system from an innovation perspective. From an innovation system perspective, the tourism innovation system may be defined as the parts and aspects of the economic structure and the institutional set-up affecting learning and innovation in tourism firms. These may be limited to a nation, a region or tourist destination (cf. Prats-Planaguma and Guia, 2004), or they may be limited to the tourism firms’ sector(s). As indicated in the former discussions, it has been stated that innovation systems are much weaker or non-existing in services (Sundbo and Gallouj, 2000; Metcalfe and Miles, 2000). However, tourism has yet not been analysed in such innovation system perspectives, thus its relevance is unclear. This article takes a first step by including empirical considerations of the innovation systems in Spain and Denmark and of different destinations within the two countries. 2.3. Conclusion on the theoretical part The three-level model presents a framework that illuminates both ends (the firm and the innovation system level) and the middle (the network level) of Coriat and


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Weinstein’s (2002) organisation–institution dimension. Thus, it presents a framework from which the search for the innovativeness of tourism firms can start. However, as has also been indicated in the above, when each of the levels is applied to the tourism industry, more questions are raised than answers supplied. The following empirical analysis, based on extensive data analysis, tries to answer these questions and to illuminate the relevance and the implications of the model. The three levels of the model will be analysed individually. However, it becomes clear during the analysis that the different levels of the model are highly interdependent and that an understanding of each level helps explain the other levels. Thus, what arises from the analysis is a complex picture of innovation in tourism which, when related to the general theoretical discussion of innovation in tourism outlined earlier in this section and to the organisation–institution dimension, has interesting and important policy implications. These are discussed in the conclusion. 3. Method and data 3.1. Analysis and method The first part of the analysis focusing on the level of the firm will develop a taxonomy of tourist firms according to their organisational form. By this is meant a combination of their size, their formal organisation, and their owner’s/manager’s approach to tourism business. This taxonomy is based mainly on the authors’ own, but also on others’ empirical research. The taxonomy will be used to discuss the determinants behind the innovative behaviour of the different categories of tourism firms. Empirical evidence of such determinants will be presented including quantitative survey results as well as qualitative interview data. Empirical evidence from the two countries, Spain and Denmark, will receive equal attention in the analysis. By including two countries with an in some ways different pattern of tourism, a wider variety of the background for the taxonomy and the determinants is provided. The analysis of networks and their role for the innovativeness of tourism firms will be based mainly, though not only, on qualitative interviews with tourism firms in Spain and Denmark in particular. In addition to providing considerations about the importance of networks for individual firms, this also allows for a comparative analysis of networks of firms located in different destinations within the two countries. The final discussion of innovation systems will primarily be of a more indicative nature based on the data already presented as well

as other research. From this, some indications of differences of innovation systems in Spain and Denmark and other countries are shown, they may be related to the innovativeness of their firms. The conclusion will emphasise and concretise the findings of the analysis, and thus provide a final indication of the characteristics of different tourism firms that determine their innovative behaviour including considerations concerning the firm, the network and the system levels. 3.2. Data The empirical data include all types of tourism firms – accommodation, restaurants, travel agencies, attractions, transport companies, etc., however, with an over-sample of hotels. The analysis takes the latter into consideration and separates hotels from other tourism firms. The empirical data are comprised of four surveys – two from the Balearic Islands in Spain and two covering Denmark as a whole – and three groups of qualitative interviews – one from Denmark, one from Spain and one from a group of different countries: S1. A survey of 300 firms in all tourism industries in the Balearic Islands in 2002/2003 (Jacob et al., 2004). S2. A survey of a representative sample of 331 hotels in the Balearic Islands in 2004. Compared to S1 a similar, but improved, questionnaire was applied (Mart´nez-Ros and Orfila-Sintes, 2005). ı S3. A survey of 170 firms in all tourism industries in Denmark carried out by Gallup/The Danish Ministry of Industry/Centre of Service Research, Roskilde University in 1999 (Jensen et al., 2001). S4. A survey of 98 firms in all tourism industries in Denmark carried out by Centre of Service Research, Roskilde University in 2001 (Jensen et al., 2001). I1. Qualitative interviews with 35 firms in all tourism industries in the destination of the Costa del Sol in the province of Malaga, Spain, as well as in rural destinations of the same province in 2002/2003 (Sørensen, 2004). I2. Qualitative interviews with 18 firms in all tourism industries as well as institutional actors in the destinations of Jammerbugten, Northern Jutland, Denmark in 2001 (Sørensen, 2002). I3. Qualitative interviews with 61 firms and actors in all tourism industries in Denmark, Norway, Thailand, France and the UK (Mattsson et al., 2006). The different surveys and qualitative interviews all illuminate the same aspects of interest: which are the

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determinants of innovation in tourism firms and which tourism firms are the most innovative. Though the data sources in their total are different and not fully compatible, the data selected and presented in the following (forming only a smaller fraction of the totality of the data collected in the different surveys and interviews) is complementary to a degree that: (1) the survey and the qualitative data sustain each other (triangulation; cf. Zelditch, 1970); (2) the application of statistical and qualitative data allows for providing explanations (through the qualitative data) of general tendencies (detected in the statistical data) and vice versa; (3) the range of data analysed allows for the observing of differences between different types of firms, destinations and countries, while also detecting the similarities between these; and (4) the range of data analysed allows for an examination of the organisation–institution continuum and thus of all levels of the theoretical model. However, the data and the article are somewhat biased towards the hotel business. This is particularly the case for the sections dealing with innovation at the firm and at the network levels. Nonetheless, considerations about the validity of the findings for other sectors of the tourism industry are added to these sections. Finally, the innovation-concept has been applied slightly differently in the different surveys and qualitative interviews. Whereas some of the survey data has approached innovation in its broadest sense including product, process, organisation and market innovations (cf. Table 3) – categories which in the survey data regarding Spanish tourism firms are differentiated in technological innovation and widened service (cf. Table 2) – the qualitative interviews have mainly focused more narrowly on product innovations, which are again comparable to widened service. In that sense, the compatibility of the data is at first glance problematic. However, as seen in Tables 2, 4 and 5 there is clear evidence in the survey data that higher innovativeness regarding widened service is accompanied by higher technological innovativeness. Translated into product, process, organisational and market innovations, a high degree of innovation within one or several of these will therefore also generally be accompanied by a high degree of innovation in the others. This may be caused by the fact that tourism firms are generally speaking either completely non-innovative or innovative in all ways; there are few firms which lie in between the two extremes and are innovative in some ways only. However, and this confirms the above, it is mainly a consequence of the real life lack of distinction between products and processes in tourism and between service and technology based innovations – one naturally leads to the other. This limits, for the

purpose of this article, the definitional problems arising from the combination of data of different origin as it is mainly the general innovativeness which is of interest here. 4. Differences in innovativeness among tourism firms The first part of the empirical analysis investigates which tourism firms are the most innovative and seeks to identify the determinants of this. Based on a taxonomy, it will be considered which organisational categories of tourism firms are the most innovative, as well as which different industries are the most innovative. We will compare the different categories of the taxonomy and discuss the explanation of the categories’ different innovativeness. Furthermore, the paper analyses what makes some tourism firms across the taxonomic categories more innovative than others. Thus, this part of the analysis will discuss the following three questions: 1. Which category of tourism firms is the most innovative? 2. Can particularly innovative firms that operate across the categories be identified? 3. Are there differences in innovativeness between different tourism industries? 4.1. A taxonomy of tourism firms according to their innovativeness The first question concerns which categories of tourism firms are the most innovative. To answer this question, the tourism firms need to be placed in a taxonomy and, thus, some criteria with which to categorise tourism firms are needed. As discussed theoretically, size has typically been considered to be related to innovativeness in service industries and this has also been claimed to be the case in tourism. The importance of size is also evident in all the surveys. Size may be measured by the number of employees, number of beds, turnover and other indicators. The surveys have measured size in terms of the number of employees or in numbers of beds. The latter, or turnover, might be slightly better than the first because it is not influenced by productivity increases. However, the results are similar whatever indicator is used (Tables 1 and 2). Thus, in all the surveys, size is clearly related to innovativeness of hotels whatever measures of size and innovativeness are applied. Therefore, size can be used as one dimension from which to create a taxonomy. However, according to the qualitative interviews from the province


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Table 1 Size (no. of employees) and innovativeness in all tourism industries Spain 2000 No. of employees Innovation intensitya Denmark 1999 No. of employees <3 3–9 10–49 >48 Large degree of innovativenessb 26 30 48 75

<50 50–249 300>

8.34 12.16 18.09

N = Spain 300; Denmark 170. Source: Jacob et al. (2004) and Jensen et al. (2001). a Number of innovations per firm within a 3-year period. b Percentage of firms that within the last 2 years has introduced an innovation.

of Malaga, though large firms are also here seen to be more innovative than small firms, it is evident that size is not the only dimension that needs taking into consideration (Sørensen, 2004). First, among the smaller firms, an important distinction between more and less innovative firms is evident. Most smaller firms are life-style based, meaning that the business activities are an integrated part of the owners’ private life and a fundamental life-style that involves working as well as family life. Most people do not want too much turbulence in their family lives, thus they are rather conservative in their business style and do not want to innovate too much. However, another category of small firms is inhabited by very development, and innovation, oriented persons. The businesses of these persons, known in the literature as entrepreneurs (e.g. Sexton and Landstr¨ m, 2000) may o be integrated with family life, however, their life perspecTable 2 Size (no. of beds) and innovativeness in Balearic hotels 2004a No. of hotels’ beds 8–60 61–219 220–1743 Total Technological innovationb 79.28 85.05 93.81 86.1 Widened servicec 31.53 45.79 67.26 48.34

N = 331. Source: Mart´nez-Ros and Orfila-Sintes (2005). ı a Percentage of hotels that have introduced technological innovation or widened service within a 2-year period. b Technological innovation refers to incorporation of technological novelties or improvements, i.e. control processes (e.g. quality control and environmental management); computer equipment; information and telecommunications technologies; kitchens; food and beverage; rooms; maintenance and savings of utilities; security; cleaning and laundry service. c Widened service refers to expansion of the offered services so as to increase added value to the stay.

tive is not primarily to protect their family life, but to be dynamic and create business. Both such types of firms, small family/life-style firms and small entrepreneurial firms, were clearly identified in the empirical studies undertaken in Malaga and the latter was clearly a more innovative type of firm than the former (Sørensen, 2004). Yet another distinction partly related to size is relevant for the taxonomy. In the above mentioned qualitative interviews, large independent firms were seen in certain ways to be distinguished from business units that were part of a corporation (or of tightly coupled chains): e.g., the step from large individual firms to corporations involves a giant leap in size, and business units of corporations have less independence to innovate on their own as decision processes are more or less centralised (Sørensen, 2004). Such different organisational forms, as well as other characteristics (considered later), may influence their innovativeness. The mentioned, qualitative and quantitative observations lead to the suggestion of a taxonomy of tourism firms operating with three categories: tourism corporations, tourism enterprises and tourism shops (Fig. 1). These are not only characterised by their size but also by other characteristics of the firms which in the taxonomy are condensed under the term “organisational form”, including the structure – is it complex and bureaucratic or simple and ad hoc, and the culture – is it a more “scientific” culture as in large industrial organisations (cf. Taylor, 1911) or is it very “practical” as in small craft and artisanal firms. Also, the question of whether the firm has several branches such as a hotel chain or only one branch is an element of the organisational form. Furthermore, derived from the above-mentioned observations, the small firms – the tourism shops – are divided into two sub-categories: entrepreneurial shops and familylife-style based shops termed “artisanal” (cf. Sundbo and Gallouj, 2000). In the following, by analysing survey data, the relevance of the taxonomy is sustained and more specific characteristics of the firm categories are distinguished. First of all, as the taxonomy is partly based on size, and as size has already been shown, statistically, to be related to innovativeness, the size dimension of the taxonomy is corroborated. Thus, tourism enterprises are more innovative than tourism shops and tourism corporations are more innovative than tourism enterprises. This is also the case, irrespective of size as is confirmed in Table 3, where the innovativeness of units of the Danish survey is established according to whether they are part of a corporation or participates in different degrees of chain co-operation (e.g. Best Western hotels). The table shows that the corporations are the most innovative.

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Fig. 1. Three organisational forms of tourism firms. Table 3 Innovation and co-operation in all tourism industries Denmark 1999 The unit is Part of corporation Yes (%) Innovativea Not innovative 67 33 No (%) 33 67 Franchise or license Yes (%) 46 54 No (%) 40 60 Voluntary chain Yes (%) 59 41 No (%) 32 68

N = 170. Source: Jensen et al. (2001). a Has introduced at least one substantial improvement of product, process, organisation or market behaviour within a 2-year period.

Further, tourism firms participating in voluntary chains (more or less tightly or loosely coupled co-operation between independent enterprises) are more innovative than enterprises or shops that do not participate in such chains. That units in the third category of co-operation, franchising chains, are less innovative than the others is not surprising since franchising is a standard concept. It is surprising that these units at all are innovative. This underlines the fact that membership of a large organisation is a strong determinant of innovation. Additionally, it indicates that network arrangements of different sorts
Table 4 Taxonomy and innovation in Balearic hotel industry 2004a Taxonomy (A) Tourism corporation (B) Tourism enterprise (C.a) Entrepreneurial shop (C.b) Artisanal shop Total Technological innovationb 93.67 92.77 86.17 70.27 86.06

influence the innovativeness of tourism firms. The roles of such networks are considered in detail later in the article. However, within the smaller tourism firms, the shops, two sub-categories have been established. These subcategories can normally not be separated in statistics because they are both small firms. However, based on the surveys differences between all the categories of the taxonomy (corporations, enterprises and entrepreneurial and artisanal shops) can be detected. Table 4 shows that also Balearic hotels in tourism corporations and

Widened serviceb 67.09 56.63 45.74 22.97 48.48

Bedsc 31,932 23,440 10,982 4,248 70,602

Firm’s average number of beds 404.20 282.41 116.83 56.64 213.30

(A) Hotels that are part of a hotel chain or of a business conglomerate with companies not operating in the lodging sector. (B) Hotels that are part of less important chains and business conglomerate and independent hotels that are large and formally organised with training plans, graduates and proactive attitude to IT; their star category is three or more stars. (C.a) Independent hotels that are smaller than those in tourism enterprise and formally organised; their star category is three or less stars. (C.b) Small independent hotels that are not formally organised; their star category is three or less stars. N = 331. Source: Mart´nez-Ros and Orfila-Sintes (2005). ı a Percentage of hotel establishments innovating within a 2-year period. b cf. Table 2. c Total number of beds offered in each category.


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in tourism enterprises are more innovative than shops. Additionally, the distinction between artisanal and entrepreneurial shops based on whether they are formally organised or not, i.e., with training plan, graduated employees and proactive attitude to IT, sustains the hypothesis that within the small sized firms there are differences according to the type of firms in terms of their innovativeness. The above has established a taxonomy of tourism firms and empirically shown the relevance of the taxonomy. In the following section, a closer examination of the characteristics of the firms in the different categories of the taxonomy will be carried out so as to provide further explanations and details of the innovative behaviour of the tourism firms of the taxonomy. 4.2. Which firms across the categories are most innovative? Within the established categories, there are certain characteristics of the tourism firms that may be of importance for their innovativeness. This will be discussed in the following data analysis where different characteristics of tourism firms will be compared with the firms’
Table 5 Innovativeness and explanatory factors in Balearic Hotel Industry 2004a Factors Variables

innovativeness. First, the relationship between innovativeness and a series of explanatory factors of innovativeness for hotels in the Balearic Islands is presented in Table 5 and for Danish tourism firms in Table 6. In both tables, it is clear that the most innovative hotels are those that use professional management instruments. Innovative hotels are furthermore more positive towards using IT. Thus, the more professionally organised hotels appear to be more innovative. Furthermore, the production system explains the innovative behaviour of the firms. In the case of the survey relating to the Balearic Islands (Table 5), it can be seen that the innovative hotels use tour operators more frequently than the non-innovators. The presence of the tour operators is an expected determinant of innovative behaviour, since they possess expert knowledge of the demand (UN, 1982) and have more negotiation power than the individual clients booking their beds directly (Sørensen, 2004). This cooperation with tour operators is one of several relevant types of network relations which are discussed in detail later. The production system is also relevant for the Danish tourism firms’ innovativeness though measured differently (Table 6). The innovative tourism firms are characterised by their production system being mostly

Technological innovationb Yes No 23.91 47.83 32.56 73.91 80.00 31.11 11.11 28.26 32.61
* * * * * *

Widened serviceb Yes 51.88 85.00 72.00 86.88 51.88 61.25 33.13 39.38 59.38 8.90 95.48 42.58 97.44 71.79 85.90 85.00 88.75 63.75 No 27.49 67.25 45.34 65.50 72.94 45.29 16.47 39.77 52.05
* * * * * *

Professional management

Member of chain Training plan Academic employees Tour operators booking Size of board < average Size of board = average Size of board > average Active customers Opened > 6 months

41.75 80.35 62.31 76.14 60.00 56.49 26.67 41.40 59.30 5.66 95.02 35.94 97.19 67.37 84.21 77.19 80.7 61.05

Production system

Organisation of innovation activities

Co-operation with externals Internal information sources External information sources Innovating for improved quality Innovating for lower costs Innovating for competing

Positive attitude to IT

URL E-mail Booking by Internet

52.17 52.17 34.78

63.16 65.50 51.46

N = 331. Source: Mart´nez-Ros and Orfila-Sintes (2005). ı a Percentage of hotel establishment innovating within a 2-year period. b cf. Table 2. * Not applicable.

J. Sundbo et al. / Research Policy 36 (2007) 88–106 Table 6 Innovativeness and explanatory factors in Danish tourism in 1999 Factor Variables Innovativenessa Yes Professional management—use of management instruments Production system A business plan Systems to measure customer satisfaction A training plan for the employees Individualised (totally customised) products Modulised products Standardised products A permanent innovation department Ad hoc project groups Use external advisors No particular way—do not know It is important to exploit the new possibilities that IT gives 58 29 30 38 47 31 22 43 31 33 78 No 24 17 10 68 53 69
* * * *


Organisation of innovation activities

Attitude to IT


N = 170. Source: Jensen et al. (2001). a % within each category innovating within a 2-year period (yes) or not (no)—answering that they use the instrument or do the activity defined. * Not applicable.

modualised (standard elements that are combined individually to the individual customer; cf. Sanchez and Mahoney, 1996; Sundbo, 1994) and by using several types of organisations of the innovation activities of which ad hoc project groups is the most commonly used type. However, 33% answer that they have no particular way of innovating or they do not consider which way to do it. The innovative behaviour of the Balearic Islands’ hotels is also positively correlated to a larger board (Table 5). Furthermore, the hotels attracting active customers, i.e. tourists with cultural or sport interests and not only for sun and beach interests, and hotels opening for more than 6 months per year are also more innovative. Probably, the hotels attracting active customers innovate to meet more client requirements. The effect of the opening period can be explained as hotels opened for longer periods will play a greater role in the creation of tourist products of the destination, will have more information, and will experience lower occupancy rates in periods of lesser demand. These hotels may be more interested in maintaining an innovative offer-structure that responds effectively to the seasonal nature of tourism (e.g., the search for ways to decrease fixed costs), they may have a greater accumulation of knowledge resources and can introduce innovations that require more trials and adjustments during periods of lower occupancy. Finally, improved quality as being an important motive for innovation is in accordance with the current nature of competition emphasising quality issues since competition on pricing is more difficult.

It can be supposed that all these determinants of innovation vary with size, thus they are stronger the larger the size of the tourism firms. This will fit with the conclusion that tourism corporations and enterprises, the largest firms, are the most innovative (Table 4). This is confirmed in the qualitative studies (Sørensen, 2002, 2004) where it is seen that tourism corporations and enterprises are those that apply professional management tools (e.g. business plans, quality control measures, employee training, etc.) to a great extent, in addition to which they employ graduates in management, development and public relations departments. Furthermore, those firms have more professionally organised innovation activities, and apply complex IT systems and the Internet. Furthermore, they are more inclined towards innovating according to tourists’ demands and they are – not least – also those that have access to the necessary finances. All this indicates that the surveys’ most salient explanatory factors for innovativeness are such that are found in corporations and enterprises. Thus, type of organisation, size, professional management, production systems and organisation of innovation activities seem to be interrelated explanatory factors of the innovativeness in tourism firms. However, as has been seen, among smaller firms, entrepreneurial shops are distinguished from artisanal shops. Again combined with the survey results, we may find an explanation of this in the qualitative studies. Contrasting artisanal shops, these entrepreneurial shops, just like larger firms, apply quality control measures, business plans and employee training to the degree that this


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is possible in a smaller firm. At the same time, the managers/owners are often academics in contrast to the typical artisanal shop where they are ‘have been all the life in the business’ people (Sørensen, 2004). As such, these firms possess certain of the same explanatory factors of innovativeness as corporations and enterprises. Additionally, these firms can be considered entrepreneurial in the sense that they are being developed around the personal belief of their managers/owners in a business idea that may, or may not, turn out to be a success. Thus, they risk their savings on building a business in contrast to the artisanal firms where a ‘steady and safe business’ is the goal. 4.3. Differences in innovativeness between tourist industries The innovativeness of different tourism industries is measured in the Spanish data (Table 7). Hotels are observed to be the most innovative, next come leisure activities (attractions, etc.) and restaurants. Transport and car rental firms are the least innovative. This demonstrates that there are differences between tourism industries. In the Danish data (Jensen et al., 2001), hotels and restaurants were found to be the least innovation oriented industries while tour operators and travel agencies were the most innovation oriented. This is different from the Spanish survey results. However, in the qualitative interviews (Danish and Spanish) other types of firms than hotels were observed to fit into the taxonomy. As such attractions that can be characterised as shops (entrepreneurial or artisanal) or as enterprises were identified and these different types of attractions’ innovative characteristics are comparable to those of the similar categories of hotels. The same counts for campsites
Table 7 Innovativeness of different tourism industries Spain 2000 Tourist industry Hotels Leisure Transport Restaurants Travel agencies Car rental Total Percentage of firms 46.66 15.00 3.00 18.34 11.67 5.33 100.00 Innovation intensitya 13.85 9.38 8.67 6.82 5.17 4.94 10.20 Innovations percentageb 63.10 13.75 2.50 12.20 5.90 2.60 100.00

though only artisanal and entrepreneurial shops where identified among the interviewed campsites. Though not statistically representative, this indicates a more general applicability of the taxonomy of tourism businesses in general. Thus, it is suggested that business-structural characteristics of different sectors of the tourism industry determine the differences in the overall innovative behaviour of the different sectors in both the Danish and the Spanish tourism industries. This issue is discussed further in the section concerning the role of innovation systems. 5. External networks in tourism innovation It has already been indicated that certain types of cooperation with units external to the tourism firms, and thus networks, are of relevance for the innovativeness of tourism firms. For example, those firms that are members of chains have been seen to be more innovative than those which are not, and those that co-operate with tour operators are more innovative than those that do not (Tables 3 and 5). The following discussion will be dedicated to establishing a more detailed insight into the role of the innovation networks related to the taxonomy of different types of tourism firms. 5.1. Networking in three regions The following analysis is mainly based on qualitative interviews undertaken in Malaga, Spain, and Jammerbugten, Denmark. In analysing the role of the tourism firms’ networks, three aspects of the networks are interesting: (1) the benefits of different types of network relations; (2) different firms’ networks; and (3) the geographical differences of the firms’ networks. Concerning the first, the empirical findings from the province of Malaga (Sørensen, 2004) indicate that local networks among firms from similar branches, for example among hotels, are dense (almost all firms participate in such), but of a loose character and provide firms with broad general information. Other types of local relations are, however, not seen to provide any innovation benefits at all. In the case of relations among complementary firms, they are either non-existent or of a very loose character, and the complementary tourism firms see each other as being too diverse to co-operate more closely and to learn from each other. Local relations with providers of inputs do not provide innovative benefits of importance either, as they concern regular inputs that are not related to product developments. The destinations are, in this way, places of loose networks, dynamism and distribution of general information, but only so among firms within the

Source: Jacob et al. (2004). a Average number of innovations per firm within a 3-year period. b Percentage of total innovations carried out in each sector.

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same industry. On the other hand, non-local network relations are seen to provide greater differences in innovation benefits. Non-local relations with distributors, mainly tour operators, are of varying strengths, whereas chain relations are typically stronger though they are also of varying strengths providing varied innovation benefits. Finally, non-local relations with providers of inputs share characteristics with the local ones. The important exceptions are stronger relations with producers of specialised inputs, which support product developments. In these relations, innovations initially made outside tourism are further developed and adjusted to the needs of the tourism firms through an interchange of specialist knowledge, ideas and needs. All in all (and contrary to general assumptions of agglomeration literature), tourism firms possess loose local networks that mainly sustain dynamism and the transfer of general information, whereas stronger networks that sustain the transfer of ‘deeper’ specialist knowledge are a non-local network phenomenon. Still, the combination of local and non-local networks has the potential to supply tourism firms with a combination of important network innovation benefits. The next observation is that different firms’ networks, and thus their benefits, vary. Not surprisingly, larger firms, i.e. corporations and enterprises, possess larger networks than the smaller shops and, just as in those aspects already mentioned, have a more professional approach to utilising and benefiting from the networks (cf. Jensen et al., 2001; Sørensen, 2004). These networks are also of a more varied character involving local and non-local relations to a varied collection of firms, thus providing more varied benefits. However, in the case of corporations, it is seen that the centralisation of networking within the central unit of the corporation limits the size of local networks to varying degrees and, thus, the benefits of such. Irrespective of this, corporations and enterprises achieve more innovation network benefits than shops. Thus, network benefits also relate to size and the other innovation variables described earlier, such as professionalism. However, an important exception from the network size–innovation relation is observed as entrepreneurial shops which have small networks turn out to be highly innovative. Whereas for artisanal shops, local relations are mainly latent and represent unused opportunities, they are for the entrepreneurial shops valued as a possibility of learning and co-operatively developing products. Entrepreneurial shops therefore take a more active approach to the networks, in particular local ones, in using and developing them (Sørensen, 2004). Though this may partly explain the higher innovativeness of the entrepreneurial shops, it is, however, also

apparent that the characteristics of these firms, described earlier, provide mechanisms that take over where the benefits of their small networks are lacking. So, while networks may in important ways support tourism firms’ innovativeness, neither the networks nor their benefits and consequences are independent of the characteristics of the tourism firms. Last, the geographical differences of networks are evident. The tourism firms of Jammerbugten in Denmark have hardly established local networks and therefore barely benefit from such (Sørensen, 2002). Similar research carried out on other Danish destinations (Roskilde (Framke and Sørensen, 2002) and Bornholm (Nilsson, 2002)) indicates that this lack of local networks may be a widespread phenomenon in Danish destinations (see also Bærenholdt et al., 2004). On the other hand, in Costa del Sol, local competitive networks are well developed and functioning. In between these extremes are the rural destinations of Malaga where local competitive networks exist without being as well developed and without providing benefits to the same degree as on the Costa del Sol (Sørensen, 2004). The reasons for these differences are several: the firms of the rural destinations of Malaga and of Jammerbugten are primarily shops in contrast to the Costa del Sol. Additionally, in the case of the Costa del Sol, an extreme spatial concentration of firms has facilitated the establishment of local networks. Finally, the role of the destinations in the minds of the managers/owners of destinations seems relevant. In the case of the Costa del Sol, a sense of a common belonging and commitment to the destination is evident whereas it is not in Jammerbugten. This may be related to the origin of the destinations. In the case of Jammerbugten, this destination is a recent political construct rather than a historically developed destination and its geographical borders seem to be relevant only for political purposes and not for local firms. Thus, while local authorities encourage the establishment of networks within this destination, local firms do not. A higher innovativeness of larger and of Spanish firms may therefore partly be related to their participation in more developed and diverse networks. 5.2. Networking in different tourism industries As has been illustrated in the above, there are differences between networks of firms located in different destinations. Furthermore, according to the findings of one of the Danish surveys, Danish tourism firms’ employ networks in their innovative activities to different degrees (Table 8). The most externally oriented industries are tourist information offices, attractions and


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Table 8 External relations in innovation of tourism industriesa Denmark 1999 Tourist information Attractions Travel agencies Transport Accommodation Restaurants 100 92 85 44 31 0

N = 98. Source: Jensen et al. (2001). a % of firms that answer that they have participated in external networks in development of innovations.

travel agencies. They are either dominated by enterprises (attractions) or corporations (travel agencies) or are forced to network (tourist information offices). The traditional tourist industries, restaurants and accommodation (hotels, pensions, youth hostels, camping sites), are those that use networks the least when innovating. However, in Denmark, these industries are dominated by shops, which may be interpreted as being mostly artisanal. By this it is indicated that different types of firms belonging to the taxonomy possess similar networks irrespective of which segment of the tourism industry they belong to. Thus, the results of the above network analysis are indicated to be valid for the tourism industry in general. However, there are still minor differences. These are evident in the qualitative studies where it is observed how attractions in particular are less oriented towards local networks. This is a result of the diversity within destinations of the attractions and the lack of similar attractions within the destinations. 6. Tourism innovation systems So far, the article has dealt with innovation at the firm and at the inter-firm levels. The following section will consider the existence of wider innovation systems in tourism. Thus, the discussion focuses on how regional, national and sectoral innovation systems are relevant in tourism, and how they may affect the innovativeness of tourism firms. At the regional, or destination level, differences in the composition of the firms, their spatial concentration and their relation to institutional actors are obvious. All of these factors seem to influence the functioning of the regional tourism innovation system. It is observed how firms of the rural region of Malaga perceive themselves to be on the margin of the information flows, which are more concentrated in the Costa del Sol, just as are educational establishments and institutional actors. This combined with the low spatial concentration and the existence of many tourism shops justify a

perception of the rural destinations’ regional innovation systems as less developed and less beneficial than is the case of the Costa del Sol (Sørensen, 2004). The regional tourism innovation system of Jammerbugten follows a similar pattern to that of the rural destinations of Malaga (Sørensen, 2002). Another important element, related to this and to the spatially concentrated character of the Costa del Sol, seems to be that of collective learning through which information becomes a public good (Capello, 1999). Whereas processes of collective learning are not evident in the other destinations, it is significant in the Costa del Sol. This also seems related to a somehow culturally based social openness characterising all the destinations in Malaga (Sørensen, 2004), but which is not evident in Jammerbugten where tourism firms seem to ‘mind their own business’ (Sørensen, 2002). A further element of the regional as well as of the national tourism innovation system seems to be differences in public/private planning measures. These have in the Costa del Sol involved coastal, beach, urban, traffic and sustainable development plans (Garc´a et al., 2004; ı Barke and Towner, 1996; Barke and France, 1996). Spanish public policies are in general designed to support the restructuring and diversification of the traditional mass tourism destinations while sustaining the development of new products such as rural or cultural tourism (Baidal, 2004). In Denmark, by contrast, tourism ‘planning’ has mainly focused on initiatives to brand the same offer in new manners and on offering new types of packages of the already existing offer rather than on actually developing or renewing it. In this way, tourism planning in Spain sustains a tourism innovation system focused on product innovation to a higher degree than in Denmark. Irrespective of the planning measures, the national tourism innovation system seems less beneficial in Denmark: tourism education (higher and lower), research, support industries and institutional attention towards tourism appear less developed in Denmark. This may be directly related to other elements of the system such as the lower spatial concentration of the tourism firms and the lower national economic importance of tourism compared to Spain. Such limits of the Danish tourism innovation system can partly explain a general lower level of innovativeness of the tourism firms. Furthermore, at the regional as well as at the national level, the composition of the sector (the concentration and types of firms) varies: Danish tourism is more dominated by shops and less by corporations and enterprises. An important aspect is demand. As described earlier, demands are of importance for the corporations and enterprises on the Costa del Sol, which innovate

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according to perceptions of the demands which is in contrast with the entrepreneurial shops where, to higher degree, personal beliefs direct innovations (Sørensen, 2004). Furthermore, as described, different firms, primarily corporations and enterprises compared to shops, have different needs for and access to finance, technologies, information, etc. and they act according to different values, professionalism and within varied innovation networks. All this indicates that even firms in the same business, such as hotels, may not be seen as participants in the same sectoral innovation system. This is even more so for different firms, e.g. attractions and hotels. Thus, a perception of tourism as one sectoral innovation system may not be a plausible one, as different tourism firms do not operate with the same knowledge base; do not utilise particular technologies, inputs and demands; and do not possess similar beliefs, objectives and behaviours. Instead, the tourism innovation system can be understood as being comprised of a variety of sectoral innovation systems. It is, as such, evident that different destinations and countries are characterised by different tourism innovation systems influencing the innovativeness of tourism firms. These characteristics of different innovation systems are, however, also partly due to the characteristics of the firms operating within the systems, which also affect the character of the networks as has been seen. This has also been demonstrated by Mattsson et al. (2006) who show how entrepreneurship creates local innovation systems. However, two entrepreneurship roles are required, the initiator – called scene maker – and one who maintains the system – called the scene taker. A condition for success in system creation is that the scene taker creates local networks which include firms and institutions from different industries and public authorities. The system creation can be explained by the existence of individual entrepreneurs and public support systems. Thus, an intimate relation between firms, networks and innovation systems is evident. 7. Conclusions and policy perspectives This article has discussed the innovative behaviours of tourism firms and the determinants of the innovativeness. Tourism firms’ innovation behaviour is related to size: the larger the firm, the more innovative it is. However, this is also related to the type of firm. A taxonomy of tourism firms has been established according to their organisational form and has been demonstrated to be able to explain the innovative behaviour of tourism firms. Tourism corporations are the most innovative followed by tourism enterprises and tourism shops that are

the least innovative firms. However, among the tourism shops, entrepreneurial shops have been distinguished as a particular innovative type of small firm. Apart from size and organisational form, other differences among the categories have been detected of which professionalism can explain a large part of the variation in innovativeness. The more professional the tourism firms are in terms of applying business and training plans, quality control systems, academic employees, IT, etc., the more innovative it is. The value of networks has also been demonstrated. The most innovative tourism firms, i.e. corporations and enterprises participate more in local as well as non-local networks, thus achieving larger and more varied innovation network benefits than shops. However, entrepreneurial shops have a more active approach towards networks than artisanal shops. Nevertheless, tourism firms can be highly innovative even when they possess very limited networks as the case of Spanish entrepreneurial shops has shown. It can further be concluded that innovation systems at regional (or destination) and national levels influence the innovativeness of tourism firms. However, the tourism innovation system may also be perceived not to be one coherent system but instead a variety of systems, when viewed from a sectoral innovation system approach, due to the high diversity of tourism firms. Among tourism firms, hotels, restaurants and transport have been seen to be the most innovative. There are, however, national differences between the innovativeness of tourism firms in Denmark and Spain with the Spanish firms being the more innovative. This can be explained by the fact that tourism shops in Spain seem to be more entrepreneurial while those in Denmark seem to be more artisanal. Further, shops seem more dominant in Denmark than in Spain, where larger and more innovative corporations and enterprises are more common. The national differences may further be explained by the fact that Spanish tourism firms, partly related to the character of the Spanish firms, are more network oriented and, in particular, participate in more developed local networks. Furthermore, the Spanish innovation systems are more innovation-procuring than the Danish ones. This is partly due to the character of the firms involved in Spanish tourism, but can also be explained by a more offensive tourism policy emphasising change of the whole tourism concept, and a market stressing innovation. Thus, Spanish tourism has taken a planned strategic turn which has created a focus on innovation and procured new entrepreneurship. The many determinants of innovation identified in the article are intrinsically interrelated: larger size or


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entrepreneurship, professionalism of varying types, networks and favourable innovation systems are all interdependent and interrelated determinants of the innovativeness of tourism firms. These conclusions indicate that innovation effort is increased and becomes more successful if a more institutionalised innovation system (cf. Coriat and Weinstein, 2002) is developed. The comparison between Denmark and Spain demonstrates that the tourist industry in Spain is more innovative than the Danish one and has more system character. The Spanish lead cannot be explained as result of a national culture or a national innovation system. It is caused by development of specific factors within the tourist industry. These factors are a combination of the existence of larger corporations within Spanish tourist industry and a political strategy for renewing Spanish tourism (from low class sun-and-beach to highclass culture tourism). The latter have among others implied a more widespread training and education system, which has increased professionalism, which again is connected with a larger innovation-orientation among managers and employees. We have even observed that formation of networks, which may be seen as a germ of innovation systems, increases when innovation increases because the firms need external actors and knowledge trajectories in their innovation process (cf. Sundbo and Gallouj, 2000). Larger firms can afford to employ people with more education, which improve their innovation capacity. Thus, differences in innovativeness between tourist industries in different geographical areas such as nations or regions may not be explained by technological systems or supplier determination, but by social factors such as managerial professionalism, good organisation and a clear policy. The latter also means that governments and other political authorities can make a difference by creating a proper strategy and policy for increase of innovation in tourism (as also demonstrated in Mattsson et al., 2006). We may on the basis of the above conclusions make some suggestions for an innovation policy in tourism. The policy makers should emphasise education and increasing managerial professionalism in the industry. One may further suggest that tourist firms should be encouraged to introduce more technology, particularly IT (e.g. Websites), and social research on customer behaviour and reactions should be supported. Still, tourist products are mostly behavioural and dependent on user needs and reaction, however, IT has increasingly become a means in the interaction with the customer and may even be a self-service instrument (cf. Fuglsang and Sundbo, 2006). Important is that all the political effort should be wrapped in a strategy with a clear goal thus the tourist firms know

in which direction to develop their innovations thus they all support each other in a common development. The innovation system in tourism should emphasise the last part of the technology–economic network (cf. Callon et al., 1992), namely the commercial development–market relation. As elsewhere in the service sector, the innovation system would be most efficient if it is strategybased and market/customer-oriented – without forgetting the technological possibilities (cf. Sundbo, 2001). Finally, while the general assumption that innovation increases with firm size has been confirmed in the article, it has also been shown how a certain type of small tourism firm, the entrepreneurial shop, is highly innovative. Smaller tourism firms have often been deemed ‘non-entrepreneurial’ and non-innovative (Shaw and Williams, 1998; Hjalager, 2002), non-networking (Bull, 1999, p. 160), and generally responsible for a lack of innovation in tourism (Hjalager, 2002). This article suggests that such a one-sided view may be distorted and that more research, to understand the dynamics of entrepreneurial shops, may be essential. Furthermore, these findings of the article could have important planning implications. Destination building based on largescale tourism firms may sustain innovative and thus competitive tourist destinations. However, going small may not only be beautiful but can, when sustaining entrepreneurial shop activities, result in highly innovative destinations as well. References
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