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Innovation typology in tourism

Innovations in these firms follow a price differentiation strategy. Production of innovation is focused on process innovations in order to increase efficiency and decrease costs. Moreover, organizational innovations are directed towards the formalization of processes. Besides, there is less investment in product innovation. As a result, products are less differentiated from those of competitors. Therefore, marketing innovations play a major role in the enhancement of market share.

Given that services in such firms are less differentiated, changing conditions in the demand may influence trajectories of such firms. Although scale intensive firms combine periods of cumulative change with the introduction of radical innovations, these innovations are new to the organization rather than new to the market. Therefore, the lack on linkages with the demand may lead to periods of stagnation.

At the macro level, destinations such as coastal resorts, whose structure is manly based on one or several scale intensive firms have also difficulties in adapting to changes in demand needs. Furthermore, because firms in these destinations have enough capacity to produce their own innovations they rely less on the interaction with other actors in the destination. Linkages are mainly limited to specialized suppliers outside the destination. Furthermore, given that one or several scale intensive firms in the destination dominate the market, institutions are less able to develop a framework based on sustainable development.

Knowledge Intensive Tourism Organizations

The activities included in this category are related to the production of different types of knowledge. Knowledge intensive tourism organizations carry out science-based research as well as applied research. These organizations are mainly universities, research centres, government and other public institutions. Nevertheless, some KIBS and entrepreneurs may also implement processes that have knowledge intensive characteristics. Although not based on research, often the processes of development of innovations in these SME’s are similar to those carried out in research centres. Furthermore, KIBS play a major role in transferring the results of research developed in universities and research centres to other organizations in the tourism sector.

Knowledge intensive tourism organizations invest more in research than other types of organizations. Furthermore, they enhance knowledge and competences inside the organization by investing in social capital. They employ high qualified personnel as well as enhance learning processes. Consequently, the level of professionalization influences innovation performance. In this context, tacit as well as codified knowledge play a major role.

These processes are also enhanced by the structure of such organizations, which is usually a dynamic and flexible one. Accordingly, knowledge production within organizations is based on bottom-up processes. This structure benefits also the adaptation to changing conditions in the environment. Besides, some managerial elements are introduced in the structure, such as formalization of innovation, which benefits a more systematic implementation of innovation processes.

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