Tourism Management 23 (2002) 465474

Repairing innovation defectiveness in tourism

Anne-Mette Hjalager
Advance/1, Science Park, Gustav Wiedsvej 10, 8000 Aarhus C, Denmark
Received 26 October 2001; accepted 24 December 2001

Abstract
Over the past couple of years, the term innovation has increasingly been used to describe the development behaviour of tourism
enterprises, destinations and the tourism sector. This article discusses various denitions. Examples of major changes in the tourism
sector are given within the framework of a model that distinguishes between regular, niche, revolutionary, architectural innovations.
It is stated that the tourism industry per se is not as crucial for innovations as the supplying and regulating sectors. Accordingly,
policies aiming at innovation in tourism should not uniformly focus on the industry itself, but take into account the driving forces of
other business sectors and the public sector. r 2002 Elsevier Science Ltd. All rights reserved.
Keywords: Innovation; Driving forces; Knowledge; Transfer processes; Policies

1. Introduction

2. Some basic denitions

Over the past couple of years, the term innovation

has increasingly been used to describe the behaviour of
tourism enterprises, destinations, and the tourism
sector. However, this increasing use has frequently
failed to take into account the fact that innovation is
actually a core issue in a research tradition that has
gained its own respect in social science. Notwithstanding, classical innovation theories have much to offer
tourism research. This paper will outline some of the
most common concepts and illustrate the potential for
tourism research.
The paper, which starts by reviewing some mainstream research approaches in the eld of innovation
studies, is divided into the following sections:

Schumpeter (1939) distinguishes between inventions

and innovations. Inventions are connected with basic
scientic or technological research, and the term is used
to dene genuine breakthroughs. Inventions are not
aimed at specic industrial use. Innovations, on the
other hand, are further developments of inventions, or
just bright general ideas for making them into useful
products. Thus, innovation is a rather pragmatic term
that can also include minor adaptations of existing
products and services. This broad denition of innovation is useful if we want to use the term to describe what
goes on in tourism.
A typology of innovations provides a good guide
for research and practice. This one is also inspired
by the early works of Schumpeter, but has been
adapted to reect the modern reality of a service
sector (Hjalager, 1994). Innovations can take place
in one or a combination of the following ve
categories:
Product innovations consist of changed or entirely new
services or products which are developed to the stage of
commercialisation, and whose novelty should be evident
to either producers, consumers, suppliers or competitors. Examples of new tourism products developed in
recent years are: Loyalty programmes, environmentally
sustainable accommodation facilities, and events based
on local traditions.

*
*

*
*
*
*

Some basic denitions.

Examples of innovations in tourismthe Abernathy
and Clark approach.
How and where is the knowledge crucial to innovation created?
Structural preconditions for innovation in tourism.
People as repositories of knowledge.
The transfer process.
Innovation policiesapplicable in tourism?

E-mail address: anne-mette.hjalager@advance1.dk

(A.-M. Hjalager).

0261-5177/02/$ - see front matter r 2002 Elsevier Science Ltd. All rights reserved.
PII: S 0 2 6 1 - 5 1 7 7 ( 0 2 ) 0 0 0 1 3 - 4

466

A.-M. Hjalager / Tourism Management 23 (2002) 465474

Process innovations tend to raise the performance of

existing operations by means of new or improved
technology, or by redesigns of the entire production
line, e.g. as a result of process re-engineering. Process
innovations can be combined with or result in subsequent product innovations. Recent examples of major
process innovations in tourism are: Computerised
management and monitoring systems, robots for cleaning and maintenance, and self-service devices.
Management innovations consist of new job proles,
collaborative structures, authority systems, etc., often in
combination with the introduction of new products,
services and production technologies. Management
innovations can result in staff empowerment through
job enrichment, decentralisation, training, etc., or in deskilling enforced by the (re)introduction of scientic
management methods.
Logistics innovations include a recomposition of
external commercial liaisons. This can affect the
position of an individual enterprise in the value chain.
Flows handled could be materials, transactions, information and customers. Recent logistics innovations in
tourism include: Vertical linkages in the food and
restaurant industries, integrated destination information
systems, CRS systems and Internet marketing, and
enhancement of airport hub systems.
Institutional innovations go beyond the individual
enterprise, representing collaborative and regulatory
structures in small or larger communities. Institutional
innovations transect public and private sectors, and set
out new rules of the game. Examples, with implications
for tourism, include: reform of the nancial incentives
that restructure social or health tourism concepts;
destination management systems and units that control
access to vulnerable areas; and the setting up or change
of credit institutions and changes in the conditions for
obtaining nance.
On the whole, enterprises are basically conservative; if
they are not challenged or threatened they will tend to
stick to usual procedures. Innovation research operates
with two different motivators that enforce or speed up
changes at the enterprise level, namely push and pull
mechanisms. Push factors are new technologies and
appropriated methods that offer more efcient solutions
to the production process, or make the product more
attractive to the customer. Pull factors are reected in
the demand from individual customers or (pressure)
groups of customers. Both factors operate at the same
time, and it is useful to distinguish carefully between
them, particularly in the denition of policy initiatives.

Clark (1985) developed a model that also applied to

other sectors. The models horizontal axis indicates
whether specic innovations make existing business
linkages obsolete, or whether they lead to an entrenchment of existing linkages between enterprises. The
vertical axis indicates the knowledge and competences
used for the production of products or services. In some
cases, old ideas and qualications become outdated and
need to be replaced, while in other cases adaptation and
further development of existing structures are more
relevant (Fig. 1).
The model illustrates four types of innovations:
Regular, niche, revolutionary and architectural. Each
has a different constellation of consequences in terms of
knowledge and collaborative structures. Architectural
innovations are the most wide-ranging, illustrated by the
rst T-Model Ford, which inuenced the concepts of
road infrastructure as well as political economy and
industrial relations traditions. Accordingly, architectural innovations imply changes not only in the industry,
but also in the society in which it will be used. The least
radical are regular, incremental innovations, but whose
impact over a period of time can become quite
considerable.
Examples of regular innovations in tourism include:
*

Niche innovations tend to challenge collaborative

structures, but not basic competences and knowledge.
With regard to innovation in tourism, researchers and
practitioners most often focus on opportunities in this
category. Examples include:
*

3. Examples of innovations in tourismthe Abernathy

and Clark approach
*

In their explanation of the establishment and development of the automobile industry, Abernathy and

New investments in larger structures, e.g. bigger

hotels with more comprehensive facilities.
Removing structural bottlenecks through changes in
technology or time-scheduling procedures.
Internal training of personnel, resulting in enhanced
or speedier service, or enabling additional advantages
to be offered to customers.
Upgrading quality standards in well-dened ways,
e.g. from a two- to a three-star classication.
Approaches to new markets with the same methods
and products.

New categories of company could be invited to enter

the tourist sector or destination as a supplement to
existing companies, e.g. a franchiser not previously
represented or a foreign investor. Suppliers of other
complementary products could be convinced that
tourism is a market for them, e.g. certain types of
retailers or providers of health services.
Establishment of marketing alliances, e.g. with
specialised tour operators in order to access new
customer groups.
New combinations of existing products. There are
many types of activity, e.g. theme co-ordinating
calendars, signboarding, event-making, etc.

A.-M. Hjalager / Tourism Management 23 (2002) 465474

467

Conserve/entrench existing
competence

Regular innovations

Niche innovations

Promoting new investments that

raise productivity

Promote the entry of new

entrepreneurs to exploit
business opportunities

Training proprietors and staff to

operate more efficiently

Conserve/
entrench
existing
linkages

Incremental raise of quality and

standards

Encourage firms to enter new

marketing alliances
Combine existing products in
new ways

Revolutionary innovations

Architectural innovations

Diffusion of new technology to

the business firms

Creating new events and

attractions that demand a
reorganisation

Introducing new methods that

shift composition of staff
Attachment to the same markets
but with new methods

Disrupt
existing/
Creating
new
linkages

Redefining the physical or legal

infrastructure
Creating centres of excellence
that treat and disseminate knew
operational research based
knowledge

Disrupt/ make
obsolete existing
competence

Fig. 1. The Abernathy and Clark modela tourism perspective.

Activating small-scale tourism resources, e.g. in

connection with agriculture.

While revolutionary innovations keep external structures unchanged, they have a radical effect on competences. A whole sector can, for example, be affected by
an aggregate shift in required skills and competences
over a longer period of time. At the enterprise or
destination level, revolutionary innovations can have the
following outcomes:
*

Diffusion of new technology in enterprises, so that

staff either stop doing what they used to do or do it in
other ways. An extreme case is the combined
development of kitchen equipment and the supply
of pre-cooked items, which removes cooking skills
from restaurants.
Electronic marketing and sales is different from
distributing brochures and pamphlets, but the customers and suppliers may well be the same.

Architectural innovations tend to change overall

structures, and establish new rules that remodel the
concept of tourism:
*

Exploitation of a new resource, e.g. Arctic tourism,

where the building of ice hotels and attractions
requires new designers, builders, equipment, marketers, etc.
Redening infrastructure, e.g. in response to environmental regulation. A ban on new tourism facilities
along the coast demands a redenition of the
economic potential in other places.
Creation of other ways of accessing knowledge in
centres of excellence.

The Abernathy and Clark model provides a framework for a clearer understanding of the nature of
particular and well-dened innovations. But the model
can be blamed for being too static and descriptive. For
example, an enhancement of the Internet might be a

468

A.-M. Hjalager / Tourism Management 23 (2002) 465474

major factor in all quadrants of the gure. Over the next

decades, the effects of the Internet might even be
aggregated to become a truly architectural innovation,
as the Ford-T turned out to be over a similar period of
time.

4. How and where is the knowledge crucial to innovation

created?
Over the years, the linkages between academic
research and the business sector have received much
attention in innovation research. A basic assumption is
that knowledge is created in academia and subsequently
transferred to enterprises for further development.
In the main, studies of the utilisation of R&D are
concerned with science and technology (Adler, 1989;
Archibugi & Pianta, 1996; Freeman, Sharp, & Walter,
1991). North American and European studies focus
mainly on patenting and business exploitation of
patents. This approach has the advantage of providing
non-discussable and uniform criteria for success: the
more patents obtained by a country or industry, the
better. The patent system encourages innovators to
protect their discoveries and the system has advantages
for the promotion of formal relations between universities and business. However, the strong emphasis on
the patent instrument draws attention away from the
many ideas and concepts that will never be formally
protected by patents. It is very likely that the service
sector, including tourism, is the locus for many more
unprotectable innovations than, for example, the
manufacturing sector.
Innovation researchers have long been preoccupied by
the fact that so little of the renewal in real life is
reected in the patenting system or in other formal
registrations of R&D activities. Social scientists interested in the development of the service sector share this
frustration. To help overcome what might be referred to
as an insight gap, new types of studies are being carried
out in the form of systematic and comparative European
and OECD surveys (Cohen, 1995; OECD, 1992). The
close connection between academia and the business
sector are seriously questioned in the surveys, which nd
that co-operation between formal R&D and enterprises
account for very little, and that contacts to customers
and suppliers are far more important for the innovation
process in enterprises.
If we adhere to the assumption that research results
produced by academia and research institutions are
important to the business sector, it becomes essential to
consider how, and in what form, knowledge is disseminated to enterprises for further development. To
what extent is knowledge actually disseminated?
Through which channels and how fast? And how is
that utilisation inuenced by the novelty value of the

information, the time factor, bias, and the receiving

capacities of the enterprise? There are many questions to
be answered, many of which are particularly crucial for
the tourist sector, as discussed below.
Rogers (1983) points out that if the receiver of
knowledge regards the information as new, then it is
new, no matter what. Rogers also directs attention to
obstacles to the fruitful dissemination of knowledge.
Social, cultural or institutional barriers can prevent
messages reaching their target. Very often, new knowledge is transferred via university and vocational teaching, and it will be future generations of staff who carry
out practical innovations based on what they learned in
the classroom. Direct co-operation between researchers
and enterprises is another possibility for dissemination,
though this might of benet only a minority of the
business sector.
The factor time constitutes two different types of
barriers. First, knowledge has to be acquired, elaborated, implemented and conrmed before it can be fully
utilised. Second, it is obvious that not all enterprises are
equally good at receiving and utilising information;
some are inquisitive early adopters, while others, at a
later stage, copy their colleagues; nally, the conservatives accept new ideas only when they are inevitable.
With regard to the capacity to absorb new information,
the size of the enterprise, the competence prole of
employees and managers, the internal division of labour
and working routines are of major importance for the
adaptation and dissemination of knowledge (Marengo,
1996).
The nature of production is decisive for the connection between academia and enterprise. Producers of
standardised products have fewer contacts, while the
acquisition of knowledge from research institutions is
higher in the case of enterprises that supply products or
services to order or in small series (Dosi, 1988).
With regard to industrial policy, politicians at all
levels acknowledge the need to remove all likely barriers
to the dissemination of research results. Thus, there is
an increased attention to institutional factors, as
dissemination is not merely a technical matter but is
also heavily dependent on social relations and social
systems.
The success of the micro-electronic industry in Silicon
Valley is an excellent example of how formal and
informal institutions facilitate the dissemination of
knowledge and subsequent innovative activities of
enterprises. Saxenian (1991) and Scott (1993) have
identied the following preconditions. First, co-operation contracts between universities and enterprises are
widespread. Second, spin-offs from universities often
take place. Third, there is an open labour market
between enterprises and universities; qualied personnel
often change jobs and duplicate their ideas and knowledge in new environments. Fourth, development is

A.-M. Hjalager / Tourism Management 23 (2002) 465474

boosted by strategic public investments that permit

enterprises to perform better than they thought possible.
Fifth, during the growth phase, geographical proximity
is a complementary advantage (Frenkel & Shefer,
1997).
Some innovation researchers (Lundvall, 1993; Nelson,
1993) use the term national innovation systems to
emphasise the presence of permanent cultural ties, and
claim that stable regulations and a certain institutional
inertia are essential to a ourishing innovation climate.
More recent innovation studies, particularly those
concerned with high-tech, tend to distance themselves
from the regional and national context observing that
the dissemination of knowledge is a global phenomenon
and that universities and research institutions do not
necessarily and exclusively comply with national innovation policies and priorities.
Much innovation research focuses on the role of
universities research capacity (Pavitt, 1993), while other
studies look elsewhere for an explanation. Ouchi (1984),
for example, in a study of Japanese co-operative
structures, nds that the Ministry of Industry was a
crucial agent for the innovative progress of Japanese
industry in the late twentieth century. Studies of
industrial districts in Italy, Germany, Denmark, etc.,
show that trade organisations, local service centres and
vocational training institutions play important roles for
innovative behaviour in small and medium-sized enterprises. In addition, some rms that co-ordinate
demand and supply take an initiating role in ideas and
inspiration, particularly when operating in business
environments characterised by trust (Maskell et al.,
1998; Pyke, Becattiniog, & Sengenberger, 1990). These
studies show that, while university research might be
important for the development of business success, its
impact should not be overestimated.
This section has provided a brief review of important
concepts and results of research over the past couple
of decades in the elds of innovation and knowledge
transfer. However, there is no particular emphasis
on tourism in mainstream innovation research. In
the next section the ndings and concepts of innovation research, with the reference to tourism, will be
exercised.

5. Structural and behavioural preconditions for

innovation in tourism
In some important respects, tourism differs from the
types of businesses usually targeted for the dissemination of research-based knowledge. In the following, we
will look at the more important features and try to
determine whether the word innovation is appropriate in this particular economic sector.

469

Studies in many countries demonstrate very clearly

that the tourism sector is dominated by micro and
small enterprises, and that most of them are owned
and operated by a single person or family. According to
R&D studies, innovation capacity isnot surprisingly
closely and positively correlated with the size of
enterprise (Rogers, 1983; Dosi, 1988). Although SMEs
can be highly adaptive to external pressures and
potentials, R&D results must usually be of a practical
nature if they are to be applied in this type of rm.
One exception to this observation is where SMEs are
units in chains and franchises. Constellations in
collaborative structures can help SMEs overcome some
of the innovation handicap, since the chain or franchise
head ofce will be responsible for the screening and
processing of vast amounts of information into something that member enterprises can use. In fact, changes
are taking place in ownership structures partly as a
response to the need to be constantly updated. Over the
past few decades, increasing numbers of tourist enterprises have become connected through ownership to
other similar enterprises (Johnson & Slattery, 1993).
Franchising and less formal networking arrangements
are also booming, but there are few indications as to
how, and to what extent, proprietors join these
organisations.
Head ofces, franchising organisations and network
service centres will (indirectly) increase the managerial
and professional capacities of the totality of enterprises
connected to these structures. These capacities are of
major importance in relation to innovation, since daily
operations otherwise tend to be the rst priority. Some
commentators (Moutinho, 1990) seem to regret that the
independence and family character of the individual
tourism enterprise is withering away. However, given
that it results from continual innovation, this is a
development that could be seen in a more positive
light.
Large tourism enterprises are more likely to be
portrayed in the trade literature for their innovative
behaviour than their smaller colleagues. This is only
reasonable since they are generally much faster to
implement new ideas, thereby creating a competitive
advantage for themselves. Smaller enterprises tend to
follow only after they have assured themselves that the
investments or changes are feasible. By its very nature,
the tourist sector makes it easy for enterprises to observe
what others are doing, unless it takes place behind the
scenes. Industrial espionage is inevitable, and ideas can
seldom be fully protected by patent laws or other
mechanisms. Proprietors who want to be market leaders
are therefore obliged to innovate constantly, and they
have to expect any advantages they gain to be quickly
eroded. The jealousies in the tourism trade are often said
to be the result of SMEs free-riding on the investments,
ideas and successes of others.

470

A.-M. Hjalager / Tourism Management 23 (2002) 465474

There is little mutual trust among enterprises in

tourism, who often see each other as competitors, not
colleagues. The example of Silicon Valley, where the
pool of knowledge and labour is a common repository
for development, is rare in the tourism sector. Not even
the fact that many destinations are heavily dependent on
tourism, and that enterprises could not survive without
each others presence, limits jealousies. Due to freeriding, collaboration is, therefore, mostly the result of
intermediation by other organisations, e.g. tourist
ofces/boards, where activities are undertaken at
arms-length from the individual proprietors. This
offsets some of the potentials of knowledge transfer, of
course.
The tourist product comprises services from several
segments of suppliers: accommodation, transport, catering, entertainment, etc. Other types of operations are
equally important to the provision of tourist services
(not least public activities such as protection of and
access to nature parks), infrastructure, cultural institutions and events. Such types of facilities are far more
likely to cultivate relations to R&D institutions than the
primary tourist enterprise, and they benet more easily
from the products of academia. We will elaborate on
this indirect infusion of knowledge into the destinations
in a later section of this paper.
The last structural and behavioural factor we will
look at in this article is the survival of enterprises. There
is little evidence to show whether new enterprises or
newly acquired enterprises are more innovative and
change-oriented than old enterprises or enterprises that
have existed for a long time under the same proprietor.
In tourism, a new owner often makes considerable
investments in the enterprise, both in terms of money
and energy. However, turbulence is very high. In
Denmark, 25 percent of enterprises change owners
every year. While high volatility is not necessarily
bad for innovative activity, it compromises consolidation of change. Moreover, when ownership changes
quickly, the establishment of trust-based collaborative
relations in destinations and/or with academia will be
hampered.
The structural and behavioural issues discussed in this
section are well known, and apply to tourism in great
many countries. If we lter the characteristics in the
innovation literature, we will come closer to answering
the question of why innovation is rareor nonexistentin tourism. A number of preconditions that
facilitate innovation are simply not present in this
industry.
However, it might be claimed that tourism is in high
need of innovation, and that an effort must be made to
promote them. The next section presents an alternative
view of channels for disseminating research-based
knowledge to the tourism sector which reects the
structural and behavioural shortcomings of the sector.

6. People as repositories of knowledge

Knowledge can be incorporated in technology, infrastructure, standards, routines, methods, etc. When a
rm buys new equipment, it already includes major or
minor innovations (Reddy, 2000). The introduction of
new technology will make some changes and innovations necessary in the purchasing rm. This idea of
codication is contrary to the mainstream assumption
that innovation is entirely a human undertaking, and
that transfer of knowledge requires at least two persons
to be successful. We have to recognise that both
codication and human transfer of knowledge takes
place simultaneously, and that in tourism the former is
probably very important due to the shortage of human
resources. The existence of people as repositories of in
tourism can be questioned for a number of reasons.
First, in most European countries, staff at all levels in
tourist enterprises receives little or no industry-relevant
training. A majority of workers in tourism have no
training beyond primary school level (Richards, 2001).
Compared with the total size of the sector, universities
and vocational training institutions supply only a small
number of graduates every year. It is, therefore, unlikely
that even quite drastic increases in the number of trained
personnel in tourist enterprise would result in a
sufcient transfer of innovative knowledge. Researchbased training for tourism is not exactly a hot issue, and
only a marginal proportion of staff have ever received
high level training.
Second, labour turnover in tourism exceeds that in
most other sectors of the economy. Due to seasonal
uctuations, large numbers of personnel are usually
engaged on short-term contracts (Hjalager, 1999a). The
industry attracts young people who work for a short
period of time, e.g. before going on to university, etc.
Increasingly, tourism enterprisesparticularly in northern Europerely almost entirely on highly exible
students on part-time contracts. The turbulence of the
sector is worsened by low salaries and non-standard
working conditions.
Third, while there are, to some extent, dedicated
careers systems in the international hospitality business,
a career in the traditional sense is not widespread in
tourism. Moreover, entrepreneurs come from many
and often irrelevantsectors, attracted more by the idea
of pursuing a certain lifestyle than adhering to traditional career issues of prestige, money and progress
(Weiermair, 1993).
Management theories about the learning organisation
(e.g. Pfeffer, 1994) claim that all employees are crucial
for the knowledge base of a rm, and that everybody
without exception must contribute to the innovation
process. However, this is quite difcult to practice in
most segments of tourism, as staff turnover hampers
the possibilities for the human-based transfer and

A.-M. Hjalager / Tourism Management 23 (2002) 465474

development of knowledge. Staffs who already have

other plans for their working life than a career in
tourism are unlikely to have adequate motivation to
contribute to development processes in the rm.
In most countries, tourism is run by a very small core
workforce in managerial positions and a very large and
unprofessional peripheral group of employees. Tracer
studies show that, even among managers, retention in
the industry is quite low (Lucas, 1995).
In fact, it could be claimed that highly mobile
qualied staff facilitates innovation and the transfer of
knowledge. But this is only the case if the reception
capacities for new ideas are favourable (Levitt & March,
1996). In many enterprises in tourism, particularly the
smallest ones, this is not always the case.

7. The transfer process

In the previous sections, arguments and evidence are
provided to show that there are serious obstacles to
innovation processes and knowledge transfer in tourism

compared with other sectors of the economy. However,

this does not mean that tourism ignores new ideas or
that tourist enterprises do not continually integrate
results of research in their operations. But due to the
structural and behavioural features of the industry, the
transfer of knowledge has to be seen in a broader
context. If we want to identify the push and pull
mechanisms correctly, the institutional frameworks that
constitute important channels of knowledge transfer
also have to be considered.
In the following, it is argued that complicated and
non-focused research results have to be distilled,
codied, and modulated before they ow into
tourism to become part of practical operations. The
tourist industry is not itself involved in this stage of the
innovation process; other organisations are thus responsible for research, and their activities facilitate the
subsequent innovation processes in the individual
tourism enterprise.
Fig. 2 illustrates four different channels for knowledge transfer: the trade, the technological service, the
infrastructural and the regulation systems.

The trade
system:
Market surveys
Best practice
Certification
Standards
IT system
Etc,

The technological
system
Equipment and techn.
Semi-manufacturing
Outsourcing

471

The
tourist
business

The infrastructural
system
Natural and cultural
attractions
Traffic, transport

The regulation
system
Safety control
Economic
control
Environmental
systems
Labour
regulations
Etc

Fig. 2. Knowledge transfer channels to the tourism business.

472

A.-M. Hjalager / Tourism Management 23 (2002) 465474

7.1. The trade system

In most countries, the trade system consists of a
number of trade associations, employers organisations
and unions. Sometimes, the organisations are divided
into subsections, confederations, task forces, specialist
centres, etc. (Selin, 1993). Research results of relevance
to the tourist industry are ltered through all these types
of organisations, and selected issues will be disseminated
in the trade press, at meetings and conferences, and used
in advisory services, etc. Some trade organisations,
possibly in competition or co-operation with academic
researchers, carry out surveys and studies of various
kinds, which is helped by easy access to the industry.
The division of labour in tourism is deepening, and
this process also inuences the trade system. Over the
past few decades, the scale and scope of trade services
has grown and developed. For example, the emphasis on
environmental issues has resulted in a mushrooming of
associations geared to undertake certication and
labelling tasks, which in many countries have become
the key intermediaries for the dissemination of environmental management practices. This means that these
organisations must collect and process knowledge and
incorporate it in standards and methods. Trade associations can, of course, also communicate directly with
research institutions in order to acquire new knowledge
of relevance to the industry.
Some trade associations are destination-based, and
many have departments in major tourism locations.
However, a structural centralisation, even globalisation,
is taking place (Pearce, 1992). As business, research and
development are becoming more global, so are trade
associations obliged to create transnational structures,
albeit often after a certain time lag. An efcient linking
of the national trade systems to international research
resources can be of importance for even the smallest
tourism provider in the most remote location (Reddy,
2000).
7.2. The technological system
Not all knowledge is explicit. As previously mentioned, the tourist sector increasingly utilises knowledge
embodied in technology (Evangelista, 1999). When
acquired in this form, the technology can fully or partly
compensate for the lack of a capacity to screen the
environment for innovation resources. In addition,
technology reduces the need to rely on human resources
and competences.
The restaurant sector is a good example of the impact
of technology on innovation capacities. The massive
development in pre-cooked food and semi-manufactured products have given restaurants a much higher
operational exibility. Basically, there is no longer the
same dependency on vocational cooking skills, and

innovative chefs are in less demand. These competences

are instead imported from the food suppliers, e.g.
from segments of the economy that not normally
regarded as part of the core tourism sector (Hjalager,
1999b).
Some food suppliers are closely connected to producers of technology and equipment, e.g. in the eld of
sous vite processing. They offer comprehensive turn-key
operational concepts to the tourism industry. Potentially, the interdependencies between the tourism sector
and its far more research-intensive suppliers are
increased. Raw materials and equipment go hand in
hand, but managerial systems can also be incorporated,
e.g. calculation or timekeeping tools. The suppliers
reect standard deciencies in many tourism SMEs, and
without the technology systems, it is unlikely that the
tourism sector could remain protable. The consequences, for better or worse, are that tourism will
increasingly become a destination-based delivery system. Production will then be outsourced to other (in this
respect), more professional bodies, possibly with urban
locations close to the worlds most efcient research
capacities. Critics may deplore this as a brain drain
from core tourism activities, and not without reason.
7.3. The infrastructural system
To a very great extent, tourism is based on free
goods: natural resources, cultural attractions, townscapes, trafc systems, etc. While organisations that
represent these resources might choose to consider
themselves as part of the tourism system, they are both
something else and something more than that.
An important point is that administrators of free
goods, usually public authorities, are in a much better
position to acquire and utilise research results than the
individual tourism enterprise. Public authorities have
more stable incomes and opportunities for economies of
scale, and their personnel is generally better educated
than is the case in tourism.
There have been many innovations in the infrastructural system. For example, museums keenly pursue new
ideas, and they rely on research in their interpretation.
Copenhagen City Bicycles is part of the creation of a
sustainable transport systems for citizens and tourists.
Scientic discoveries can inuence how natural park are
managed, and there are many more examples. However,
the impact of infrastructural systems on innovation in
tourism is still poorly understood.
7.4. The regulation system
Regulation in the form of mandatory actions,
prohibitions and punishments give clear behavioural
signals to the industry. But often regulations also
contain a substantial bulk of knowledge, which is

A.-M. Hjalager / Tourism Management 23 (2002) 465474

rapidly diffused to potential users, whether they like it

or not. For example, if the authorities require higher
hygienic standards, this will necessitate an immediate
learning process in the enterprises concerned. Hotel res
and shipwrecks lead to a rapid increase in knowledge on
safety methods and an equally rapid dissemination of
information to relevant enterprises. For example, an
industry response to raids by the tax authorities against
tax exemption or illegal work could be the upgrading of
nancial management systems.
Knowledge that feeds into regulations comes from
many places. In the case of food hygiene, for example,
academic bacteriological research is of major importance. But specication into rules and practical instructions is often undertaken by ministry departments,
agencies or specialist laboratories. Although systems of
this kind are not often regarded as part of the tourism
innovation system, they might play a major, albeit far
from recognised, role for the renewal and updating of
tourist facilities.
Most regulations are motivated by safety, health or
justice. But it is clear that economic or technical
regulations can indirectly be used to provoke structural
development. So far, however, tourism research has
dealt insufciently with the impact of regulation on
survival of enterprises, speed of innovation and professionalisation in the trade.

8. Innovation policiessome concluding remarks

The previous sections have discussed innovation in
tourism within various conceptual frameworks, all more
or less well known in mainstream innovation research. It
is no small challenge to see this particular sector through
the eyes of a research tradition most often used to
analyse biotechnology, automobiles, and pharmaceuticals. It is very clear that industry structure, development
dynamics, heterogeneity and human resource capacities
differ considerably. Since the determinants are to be
found outside the core tourism sector, innovations in
tourism must therefore be seen in a wider economic
context.
Much of the emphasis in innovation research is on
policy aspects (Archibugi, Howells, & Michie, 1999).
What instruments should be used to promote the speed
of innovation, and what public incentives could change
the intensity and direction, if necessary? The same
questions are relevant in the case of tourism. Society at
large has a genuine interest in upgrading what is
regarded as a nancially struggling industry with lowquality services to a professional and respected stakeholder in economic life.
However, while the policy questions are the same, the
answers are different. Efcient innovation policies for
tourism are not likely to include R&D subsidies,

473

measures to promote university-business collaboration,

technology scouts, and the like. The ideology behind the
EUs Fifth Framework Programme does not apply all
that well to the realities in tourism. Only large
corporations or groups of enterprises anked by
auxiliary bodies are likely to respond. Patents are not
feasible in tourism, but much could be gained by
enforcing licensing and certication.
On the human side, it can hardly be expected
that research-based training will create major direct
impacts in the industry. Evidence shows that the
brightest brains disappear too soon to make a real
impact (Iverson & Deery, 1997). This does not mean
that managerial and research based training is irrelevant. Bright brains of importance for innovation is
tourism are just not employed in the tourism industry,
but elsewhere.
It is important to acknowledge that the transfer of
knowledge to tourism takes place through a range of
lters, and that these lters are highly important for a
successful implementation of innovation in tourism.
Innovation policies should therefore either target or
specically include the trade system, the technology
system, the infrastructural system and the regulation
system, possibly in collaboration with the primary
tourism operators. Strategic public procurement (Edquist & Hommen, 2000) has only been marginally used
to promote innovation in tourism, and the regulation
has a far more shady reputation than it deserves
(Hjalager, 1998). No architectural or niche innovations
are likely to take place without some push or pull from
these external systems.
Eventually, it must also be recognised that innovative
capacities are signicantly higher in the larger tourist
enterprises and in enterprises connected to chains and
other horizontal collaborations. These rms are role
models for all those small entrepreneurs who are still
and will be for many years to comethe main providers
of tourism services.
For the purpose of future policy-making, the insight
into the dynamics of innovations in tourism is much too
scanty. Many nations and destinations recognise innovations, but they want to see changes taking place
with higher speed. However patterns of enterprises
response to external stimuli are not well-mapped. Based
on studies of innovation in the service sector, Barras
(1986) concluded that enterprises tend to invest quite
rapidly in new technology, but only eventually, if at all,
they will discover the more subtle, but important
potentials for product innovations, changes in organisation etc. There will be considerable time lapses before a
full effect of a technology push can be reached. The idea
of a technology push is included in a programme
launched by the New Zealand Foundation for Research,
Science and Technology, under the title: Building
business capabilities within New Zealand tourism

474

A.-M. Hjalager / Tourism Management 23 (2002) 465474

industry SMEs trough the adoption of information

technology and e-business solutions.
It is even more difcult to predict the dynamic
reactions to stimuli that come out of the institutional,
infrastructural and trade systems. It is a task for
researchers to track back the impacts on innovation in
the tourism enterprises. What did a particular piece
of legislation do to tourism, for example an enforcement
of hygiene requirements in restaurants, or standards of
access for the disabled? Or to what extend and with what
results did tourism enterprises participate in R&D
programmes with other industries? Or how did a newly
designed interactive RTO web-site affect the organisation of marketing in the individual enterprise? For this
purpose researchers will have to be sensitive to the fact
that the institutional, infrastructural and trade system
are possibly even more dynamic that the tourism sector
per se.

References
Abernathy, W. J., & Clark, K. B. (1985). Innovation: Mapping the
winds of creative destruction. Research Policy, 14, 322.
Adler, P. S. (1989). Technology strategy: A guide to the literatures.
Research on technological innovation. Management and Policy, 4,
25151.
Archibugi, D., Howells, J., & Michie, J. (Eds.) (1999). Innovation
policies in a global economy. Cambridge: Cambridge University
Press.
Archibugi, D., & Pianta (1996). Innovation surveys and patents as
technological indicators: The state of the art, OECD (Ed.),
Innovation, patents and technological strategies (pp. 1756). Paris:
OECD.
Barras, R. (1986). Towards a theory of innovation in services.
Research Policy, 15, 161173.
Cohen, W. (1995). Empirical studies of innovative activity.. In P.
Stoneman (Ed.), Handbook of the economics of innovation and
technological change (pp. 182264). Oxford: Blackwell.
Dosi, G. (1988). The nature of the innovative process. In G. Dosi et al.
(Eds.), Technical Change and Economic Theory (pp. 221238).
London.
Edquist, C., & Hommen, L. (2000). Public technology procurement
and innovation theory. In C. Edquist, H. Leif, & T. Lena (Eds.),
Public technology procurement and innovation (pp. 570). Boston:
Kluwer Academic Publishers.
Evangelista, R. (1999). Knowledge and investment. The sources of
innovation in industry. Cheltenham: Edward Elgar.
Freeman, C., Sharp, M., & Walter, W. (Eds.) (1991). Technology and
the future of Europe. London
Frenkel, A., & Shefer, D. (1997). Technological innovation and
diffusion models: a review. In C. S. Bertuglia, L. Silvana, & N.
Peter (Eds.), Innovative behaviour in time and space (pp. 4163).
Berlin: Springer.
Hjalager, A.-M. (1994). Dynamic innovation in the tourist industry.
Progess in Tourism Recreation and Hospitality Management, 6,
197224.
Hjalager, A.-M. (1998). Environmental regulation of tourism Impacts on business innovation. Progress in Tourism and Hospitality Research, 4, 1730.
Hjalager, A.-M. (1999a). The immigrants on the tourism labour
market, paper for the IGU Study Group of Sustainable Tourism,
Flagstaff, October. Current Issues in Tourism.

Hjalager, A.-M. (1999b). Technology domains and manpower choice

in the restaurant sector. New Technology, Work and Employment,
14(1), 8193.
Iverson, R. D., & Deery, M. (1997). Turnover culture in the hospitality
industry. Human Resource Management Journal, 7(4), 7182.
Johnson, S. M., & Slattery, P. (1993). Hotel chains in Europe. London:
EIU Travel and Tourism Analyst, no. 1.
Levitt, B., & March, J. G. (1996). Organizational learning. In M. D.
Cohen, & S. S. Lee (Eds.), Organizational learning (pp. 516540).
Thousand Oaks: Sage.
Lucas, R. (1995). Managing employee relations in the hotel and catering
industry. London: Cassell.
( (1993). User-producer relationships, national systems
Lundvall, B.-A.
of innovation and internationalization. In D. Foray, & F.
Christopher (Eds.), Technology and the wealth of nations. The
dynamics of constructed advantage (pp. 275300). London: Pinter
Publishers.
Marengo, L. (1996). Structure, competence and learning in an adaptive
model of the rm. In G. Dosi, & M. Franco (Eds.), Organization
and strategy in the evolution of the enterprise (pp. 124154).
Macmillan Press: Houndsmill.
Maskell, P., et al. (1998). Competitiveness, localised learning and
regional development. Specialisation and prosperity in small open
economies. London: Routledge.
Moutinho, L. (1990). Strategies for tourism destination development:
An investigation of the role of small businesses. In G. Ashworth, &
G. Brian (Eds.), Marketing tourism places (pp. 104122). London:
Routledge.
Nelson, R. R. (1993). National innovation systems. New York, Oxford:
Oxford University Press.
OECD (1992). The Oslo manual. Guidelines for collecting and
interpreting technological innovation data. Paris: OECD.
Ouchi, W. G. (1984). The m-form society. New York: Avon Books.
Pavitt, K. (1993). What do rms learn from basic research? In D.
Foray, & F. Christopher (Eds.), Technology and the wealth of
nations. The dynamics of constructed advantage (pp. 2940).
London: Pinter Publishers.
Pearce, D. (1992). Tourist organizations. Harlow: Longman Scientic
& Technical.
Pfeffer, J. (1994). Competitive advantage through people. Unleashing
the power of the work force. Boston: Harvard Business School
Press.
Pyke, F., Becattini, G., & Sengenberger, W. (Eds.) (1990). Industrial
districs and inter-firm co-operation in Italy. Geneva: International
Institute for Labour Studies.
Reddy, P. (2000). Globalization of corporate R&D. Implication for
innovation systems in host countries. London and New York:
Routledge.
Richards, G. (2001). Mobility in the European tourism sector the role
of transparency and recognition of vocational qualifications.
Luxembourg: Cedefop Panorama Series.
Rogers, E. (1983). Diffusion of innovation (3rd ed.). New York: The
Free Press.
Saxenian, A. (1991). The origins and dynamics of production networks
in Silicon Valley. Research Policy, 20, 423437.
Schumpeter, J. A. (1939). Business cycles a theoretical, historical, and
statistical analysis of the capitalist process. New York, London.
Scott, A. J. (1993). Technopolis. Berkeley: University of California
Press.
Selin, S. (1993). Collaborative alliances: New interorganisational forms
in tourism. In M. Yusal, & R. F. Daniel (Eds.), Communication and
channel systems in tourism marketing (pp. 217228). New York: The
Haworth Press.
Weiermair, K. (1993). Innovation und Innovationsverhalten im
touristischen Betrieb: Wachstumsstrategien fur
. beherbergungsbetriebe im alpenl.andishen bereich. Revue de Tourisme, 1, 1421.