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Plaza et al

  1. 1. African Journal of Business Management Vol. 5(2), pp. 464-480, 18 January, 2011Available online at 1993-8233 ©2011 Academic JournalsFull Length Research PaperOrchestrating innovation networks in e-tourism: A case study Beatriz Plaza*, Catalina Galvez-Galvez and Ana Gonzalez-Flores Department of Applied Economics, Faculty of Economics, University of the Basque Country, Avda Lehendakari Agirre 83, 48015 Bilbao, Spain. Accepted 8 October, 2010 In the traditional perspective of industrial policy, technology becomes the main driver for economic innovation. Innovation-Networks literature, while rich in descriptions of innovation dynamics and typologies, is mostly technology focused. A recent and growing literature sees how non-technological innovations are becoming crucial (for instance, learning by doing) and the tourism sector is not an exception in this regard. Non-technological innovations in services can also arise from investment in intangible inputs (for example, strategic networking). The aim of this paper is to analyze the innovation processes in e-Tourism driven by networking processes. It shows that e-Tourism innovation networks, although composed of micro-firms, can exert international reach, to the extent that intra-network peer coaching and Knowledge Intensive Business Services (KIBS) play a key role in innovation transfer to SMEs. Key words: Innovations networks, SMEs, knowledge transfer, learning processes, R&D management, ICTs, e- tourism.INTRODUCTIONThe ICTS revolution and technological innovations in becoming one of the main forces steering strategice-tourism renewal efforts of tourism-related businesses around the sector. Of course, not all tourism-related businessesE-Tourism, or travel technology, is an expression model innovations are ICT driven, even though presentemployed to express the application of Information and strategic planning figures to a great extent in ICT-relatedCommunications Technology (ICT), to the travel, tourism business model innovations. The recipe to success lies inand hospitality industries. Growth in ICTs encompasses the fast recognition of buyer needs and in supplyingchanges in business practices and strategies, as well as prospective clients with wide-ranging, customized andindustry structures. In fact, ICT technologies are up-to-date products and services that suit their wants.decoupling the tourism value chain. The Internet is Travellers demand websites to be informative and useful,altering the industry structure (Porter, 2001) by changing interactive and appealing. The advancement in ICT-s hasbarriers to entry, minimising switching costs, transforming empowered the present-day tourist who is becoming well-distribution channels, making possible price transparency informed and is searching for distinctive value for timeand competition and affecting differentiation and cost and money.structures. In fact, the tourism industry is taking a lead in Buhalis (2008) stated that, “potential tourists havee-Commerce applications. Business model innovation is become more independent and sophisticated on using aworld. Advances in ICTs have accelerated a recent wide range of tools to arrange for their trips. Theseinterest in business model innovation in the tourism include reservation systems and online travel agencies (such as Expedia), search engines and meta-search engines (such as Google and Kayak, respectively), des- tination management systems (such as,*Corresponding author. E-mail: Tel: +34 social networking and web 2.0 portals (such as Wayn and946013641. Fax: +34 946017087. Tripadvisor), price comparison sites (such as Kayak or
  2. 2. Plaza et al. 465Kelkoo) as well as individual suppliers and intermediaries beaches and sunny weather, but also by (2) promotingsites”. Still, the European Commission through its new tourism-related business models that arise as aInformation Society Technologies Advisory Group result of the new ICT-s; and (3) by setting up tourism-(ISTAG) in relation to strategic trends of European ITC related Innovation systems.research shows that current research within the domain In this context, there is an urgent need for investmentof communications and information technologies (ICTs) and innovation to support the tourism industry. Thewhen applied to tourism is complex and extremely difficult Spanish government is implementing a long-standingand that the improvement made in this field of expertise policy to target the high-end of the market by promotingis still insufficient (ISTAG, 2009). ICT technologies are innovation. Spanish policy makers have prioritized thedecoupling the tourism, travelling and mobility value tourism sector significantly and the regional authoritieschain. The Internet is changing the industry structure by are not an exception in this regard. Much emphasis hasaltering barriers to entry, reducing switching costs, been placed on the importance of public-privatetransforming distribution channels, making possible price innovation partnerships as a backbone to this city/transparency and competition and affecting cost regional growth. The aim of this paper is to investigatestructures. In this context, there is an urgent need for significant patterns of effective innovation withininnovation networking to support the tourism industry. “Knowledge Intensive Services for Private-PublicThus, to support this fact, this article explores an Innovation Networks in e-Tourism” through a case study:innovation network in e-Tourism using a case study in CICtourGUNE, a Competence Research Centre forSpain. In the following paragraphs the reasons why the tourism, set up to foster interaction between the differenttourism sector and Spain have been selected are actors in the Tourism Innovation and (or) e-Travellingexplained in detail. Why the tourism sector? Tourism is innovation field. It currently has 28 partners, whichone of the fastest growing and largest industries include consulting companies, destination managementworldwide. According to the World Tourism Organization partnerships, universities, technology centres, ICT(UNWTO), in 2009, international tourist arrivals reached technology suppliers, knowledge intensive business880 million. UNWTOs ‘Tourism 2020 Vision’ forecasts services (KIBS), tourism companies and developmentthat international arrivals are expected to reach nearly 1.6 agencies. Why CICtourGUNE? Tourism is a particularlybillion by the year 2020 (Figure 1). Furthermore, the complex industry which involves a set of activities aimedtourist industry has become global, with its major players at attracting visitors to a geographical area, receivingextending their cooperation to reach local SMEs these visitors and satisfying their demands. It(management contracts, branding, global reservation encompasses transportation; services in the place ofsystems, franchising). Why Spain? The World Tourism origin (travel agencies, tour operators, online informationOrganization reports the most visited countries from 2006 services); residential infrastructures (hotels, apartments,to 2009 by the number of international travellers. The top second homes, camp sites); and services at the place ofvisited countries from 2006 to 2009 are France, United destination (banking, accommodation, foodservice,States and Spain. France continues to lead the ranks in leisure, sports, culture, health care, insurance orterms of tourist arrivals (with 74.2 million tourists in 2009), security). All these services articulate a highly complexfollowed by the USA (54.9 million international visitors) value chain, and it is for this reason that networkingand Spain (52.2 million international tourist arrivals). becomes a critical fundamental of tourism firms aiming toWorldwide, international visitors declined by 4.3% in maintain and improve their competitive position. It is also2009. Despite this overall decline, France, the USA, for this reason that CICtourGUNE, an innovation networkSpain, China and Italy retained their positions as the top for tourism, was set up. Centres for the promotion of5 destinations. innovation in the tourism sector have existed since 2000 In 2001, Spain overtook the US as the second leading in Spain. These include SEGITTUR (State Company fortravel destination in the world. However, 2008 witnessed Tourism Information Management), IBIT (Illes BalearsSpain losing its second place to China and the US, due to Innovation and Technology), TECNOTUR (Technologyits maturing tourist market, fierce competition among the Centre of Tourism, Entertainment and Quality Lifedestinations combined with fierce competition among Andalusia), CINNTA (Foundation Centre for Innovation intourism service providers, and dramatic changes in Tourism Andalusia) and/or ITH (Instituto Tecnológicoconsumer behaviours and technologies. Recent Hotelero in Madrid). Different from these researchtechnological advances have led to the appearance of centres, CICtourGUNE has appeared as a strategic R&Dnew players in the industry; new players in the value network within a sector in which networking andchain have arisen and strategic alliances have become cooperation among stakeholders has turned into a vitalcritical to competition on a global scale. In order to solve feature of sustained and sustainable development. It isthese competitive tensions, Spain is developing its travel for this reason that this work analyses the case ofand tourism industry by (1) diversifying its travel and CICtourGUNE. The aim of this article is to evaluatetourism industry, which no longer focuses just on sandy CICtourGUNE’s networks and to describe how networks
  3. 3. 466 Afr. J. Bus. Manage. Million Figure 1. UNWO Tourism Vision 2020 (international arrivals). Source: WTO (2001a; b).with elements literally outside CICtourGUNE play an activities also include R&D that is not directly related toactive role in the networking process. the development of a specific innovation. An innovative firm is one that has implemented an innovation during the period under review (Oslo, 2005).TOURISM INNOVATION Table 1 summarizes the principal types of innovation.The technological innovation vs. the non- The tourism sector encompasses a myriad of non-technological innovation dilemma technological innovations (for example, marketing innovations and/or organizational innovations). In fact,Tourism innovation usually begins when governments tourism firms place more emphasis on non-technologicalprioritize the tourism sector significantly, and the country innovations than manufacturing firms. These non-makes a significant effort to attract tourists through robust technological innovations, however, are hard to measuredestination-marketing campaigns and by ensuring their since innovation statistics are still strongly orientatedattendance at many international tourism fairs (Blanke towards technological innovations. Measurement ofand Chiesa, 2009). In other words, up until now public output, factor and knowledge inputs in tourism is one ofauthorities have made huge efforts to strengthen the the key areas where initiatives are needed.demand side of the equation, whereas the supply side of The tourism innovation agenda for the future requiresthe equation has remained untouched. In this context, statistical innovation. There is also a need to betterinnovation is seen as a priority as it attempts to overcome understand the specificities of innovation in tourismthe challenges associated with conventional tourism. (European Commission, 2007) and to support all forms ofHowever, let us define innovation more clearly: innovation, not only technological innovation (Gallouj and Weinstein, 1997). To develop and test new policyAn innovation is the implementation of a new or approaches in support of innovation in tourism and thussignificantly improved product (good or service), or pro- to target innovation in tourism policy as well as tocess, a new marketing method, or a new organizational promote trans-national cooperation, can all help to fostermethod in business practices, workplace organization or the tourism innovation agenda.external relations. The minimum requirement for aninnovation is that the product, process, marketing methodor organizational method must be new to (or significantly Non-technological innovations in tourism: Theimproved for) the firm. Innovative activities are all public-private innovation networks in tourism (PPINT)scientific, technological, organizational, financial andcommercial steps which actually do, or are intended to, From the traditional perspective of industrial policy, tech-lead to the implementation of innovations. Innovative nology becomes the main driver for economic innovation.
  4. 4. Plaza et al. 467 Table 1. Main types of innovation. Product innovation Product innovation is the introduction of goods or services that are new or significantly improved with respect to their characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics. Product innovations can utilize new knowledge or technologies, or can be based on new uses or combinations of existing knowledge or technologies. Process innovation Process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software. Process innovations can be implemented in order to decrease unit costs of production or delivery, to increase quality, or to produce or deliver new or significantly improved products. Marketing innovation Marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing. Marketing innovations are aimed at better addressing customer needs, opening up new markets, or newly positioning a firm’s product on the market, with the objective of increasing the firm’s sales. Organizational innovation Organizational innovation is the implementation of a new organizational method in the firm’s business practices, workplace organization or external relations. Organizational innovations can be implemented in order to increase a firm’s performance by reducing administrative costs or transaction costs, improving workplace satisfaction (and thus labour productivity), gaining access to non-tradable assets (such as non-codified external knowledge) or reducing costs of supplies. Source: Based on “Oslo Manual”, 3rd edition, 2005.Innovation-Networks literature, while rich in descriptions significant patterns? What do the patterns look like?of innovation dynamics and typologies, is mostly tech- PPINT become effective innovation engines to the extentnology focused. However, a recent and growing literature that they reduce the innovation transaction costs betweenshows how non-technological innovations are becoming at least two actors (nodes or elements) in the network.crucial (for instance, learning through practice), and the There is clearly room to improve the way in which wetourism sector is not an exception in this regard (Sundbo, facilitate and support services, R&D and innovation asOrfila-Sintes and Sørensenc, 2007). Non-technological part of a wider innovation system.innovations in services can also arise from investment in The tourism industry is highly dependent on public-intangible inputs (for example, strategic networking). private innovation partnerships in Information andChanges in people’s tastes and behaviour are (also) Communication Technologies (ICTs), thus makingresponsible for changes in products and services technological innovations critical for establishing(European Commission, 2008). Much emphasis has been competitive advantages (Werthner and Klein, 1999). Yetplaced on the importance of public-private innovation most innovations currently happen outside of the industrypartnerships as a backbone to regional growth. Case and are only later adopted by organizations within thestudy research points out that some particular regions tourism industry (Plaza et al., 2009). This is partly due tohave a competitive advantage in innovation partnerships the unique structure of the industry and the particularover others, yet we have little by way of a satisfactory nature of its products. Tourism experiences consist of ameans of formally studying the networking patterns of variety of products and services, which need to bethese partnerships to demonstrate how the specific case created, marketed and sold by a multitude of businesses.studies fit into a larger pattern of effective innovation that These businesses are typically small and do not engagecan be applied to more than one place. Nodes and in research and development-related activities, or at leastnetworks characterize all important innovating not to the extent common in other industries. While colla-phenomena; interaction, mobility and intangible elements boration is necessary and implemented in some areas,are becoming increasingly important. However, what are collaborative efforts in tourism are still limited, despite thethe conditions required for Public-Private Knowledge great need for knowledge sharing and cooperation inIntensive Business Services Networks to become order to effectively sell tourism experiences and destina-effective innovation partnerships? Are the Knowledge tions (Wang and Fesenmaier, 2007; Novelli et al., 2006).Intensive Services for Private-Public Innovation Networks Research on innovation networks in the tourismin Tourism themselves in fact exhibiting robust and industry is still at a early stage but the already existing
  5. 5. 468 Afr. J. Bus. Manage.literature has identified various loci of innovation in exploring the CICtourGUNE public-private innovation network intourism (Hjalager, 2002) and has examined innovation at knowledge intensive services. There are ‘5 core dimensions’ by which each case-study can be categorized. In addition, there arethe destination level (Stamboulis and Skayannis, 2003; some key features to specify different alternatives/variants alongVolo, 2005), within the hotel industry (Weiermair et al., each of the 5 dimensions. These 5 dimensions come from2005; Orfila- Sintes et al., 2005) as well as within other ServPPIN’s [] previous theoretical andsmall and medium sized tourism enterprises (Pikkemaat empirical understanding of public-private innovation networks:and Peters, 2005; Pikkemaat and Weiermair, 2007). Although limited in number, these 5 core dimensions are in accor-Innovation in tourism services is widely accepted as a dance with a number of common issues with innovation networks (Sundbo, 2010): Static and dynamic patterns of PPINT, factorsvalue generating activity that is particularly important in influencing their evolution, key factors that determine success at ancreating an advantage for tourism destinations in com- early stage of the life cycle, leadership and innovation, key actors,petition with other destinations (Hjalager, 2002; Ritchie what are the governance structures, which are the PPINTand Crouch, 2000; Volo, 2005). As noted by Barras innovation appropriation regimes, potential impacts and policy(2000) and Hjalager (2009), distinguishing innovation implications (ServPPIN, 2009). The aim of this common framework is to generate generic knowledge about private/public networks andtypes is not necessarily simple, since innovation in one service innovation, applicable to other case studies worldwidefield leads to subsequent innovations in others. (Table 2). Several articles on knowledge transfer in connection This research is based on in-depth interviews in the field, of thewith innovation have been published by the ‘African CICtourGUNE network partners. Semi-structured qualitativeJournal of Business Management’ in recent years: Singh interviews were carried out with R and D managers fromand Singh (2009) try to develop an understanding of the CICtourGUNE, firms (consulting companies, technology suppliers and tourism firms), universities, technology centres, developmentchanges in innovation in services, from technology agencies and destination marketing organizations (mostly public-adoption to complex complementary changes in private partnerships) belonging to the network (Figure 2).technologies, skills and organization. Chuang et al. In the case of the CICtougune technology-transfer agency, the(2010) discuss the analytical typology of organizational institutional context influences the whole of the innovation and diffu-innovation in the service industry. Phambuka- sion process. It is for this reason that we devote the next section toNsimbi (2010) reviews the literature on clusters and their the study of the Basque Regional Innovation System (RIS).contribution to building a competitive advantage forservice businesses. Khan et al. (2009) explore the Institutional factors that support the CICtourGUNE PPINT: Amoderating role of organizational size in the relationship rich systemic networking environmentbetween transformational leadership and organizational How does the institutional context influence the innovation andinnovation. However, the analysis of an innovation net- diffusion process? Are regional and national differences important?work for e-Tourism is a novelty for the whole discipline. Innovation was seen as a priority as it attempted, in the case of CICtourGUNE as a Public-private Innovation Network Bilbao, to overcome the challenges associated with an old-in Tourism (PPINT) constitutes an organizational industrialized economy. In the 1970s, 1980s and early 1990s, theinnovation for boosting innovation in e-Tourism (Figures 2 Basque Country went through a very severe crisis; the situation of aand 3). Therefore, it is an example of non-technological deep recession, marked by uncertain elements (unemployment, socio-political instability, loss of a reference point in social valuesinnovation, although at the same time, some of its and so on) that required urgent industrial restructuring. To reversepartners are actually involved in creating technological these negative dynamics, the Basque Government made a hugeinnovations. effort to build a regional innovative infrastructure to support the In this paper, CICtourGUNE is approached using the modernisation of its traditional industries and nurture new industrialmethodology set up by ServPPIN and service activities. Technological Centres and Parks were[] and then the empirical results created in the 1980s as a response to the necessity to upgrade the level of technology of the obsolete Basque production structure.of this subsequent innovative networking in tourism are In the 1990s a new demand-driven policy, rather than a top-downexplained. technology scheme, was launched. A whole new typology of innovation actors flourished throughout the 1990s, in which the Technology Centres were no longer the only goal (Rico-Castro,Public-private innovation networks in tourism 2005). Independent R&D units within firms, new research centres,(PPINT): A case study certification and testing labs, sectoral centres and Universities were grouped under a common association called SARETEK (the Basque Science, Technology and Innovation Network) at thePublic-Private Innovation Networks in Tourism (PPINT) is request of the Basque Government. Clusters and cluster-drivenan organizational innovation for boosting innovation in the policies took the lead in the new demand oriented technology policytourism sector. rationale. In the year 2007, the Basque Government launched the Basque Innovation Agency(Innobasque), which is made up of SARETEK, private companies, public Basque institutions, officialMETHODOLOGY representatives of Basque management and employees and all kinds of organisations connected with innovation. Innobasque hasIn this paper, the common methodological framework developed taken the lead in the new innovation networking driven policy,within the ServPPIN project [] is used for hence dissolving the old SARETEK. The creation of Innobasque
  6. 6. Plaza et al. 469 Figure 2. An e-Tourism Innovation Network Case Study: CICtourGUNE’s partners. Source: CICtourGUNE.shows that the regional government is paying increasing attention districts’ or innovative clusters which, although composedto the challenges of knowledge transfer to SMEs (Olazaran et al., of micro-firms and small-to-medium ones, could2009). Private-public networks and nodes characterise all nevertheless exert global reach”. (Cooke, 2008).significantly connected innovative phenomena, and point to a richinnovation infrastructure. As part of these efforts, a number of cooperative research Analysis of a case study: The CICtourGUNE strategiccentres (CICs) have been set up to strengthen strategic public- networkprivate networking. At present, there are CICs for nano-technologyand nano-science, high-performing manufacturing and energy, Tourism experiences consist of a complex variety ofmicrosystems, biomaterials and biotechnology and lastly, fortourism innovation, a network called CICtourGUNE. products and services, which need to be supplied by a myriad of companies. In this context of multitude Philip Cooke (2008), an authority on Regional Innovation businesses within the tourism value chain, much Systems (RIS), underlines that “three key factors were emphasis is being placed on the relevance of strategic visible [for the Basque Country]: first, how a de- networking as a backbone for sustained competitiveness. industrialising region depended upon possessing The centre for cooperative research in Tourism, intermediary agencies with innovation and industry CICtourGUNE, is a graphic example of that strategy expertise, independent of the government (though part- research. CICtourGUNE was set up in 2006 in the city of funded by so-called generic project-funding distributed by the Basque government) and of the then new and not San Sebastian (Basque Country, Spain), through the significantly research active university sector. These collaboration of the Basque Government, the Technology aspects would project Basque industry into a new future Corporation Tecnalia, Vicomtech Technology Center and different from the disappeared heritage of steel-making the University of Deusto. Its origin is based on the and ship-building. Second, how systemic in terms of Competitiveness and Social Innovation 2006-2009 networking connectivity the whole and particularly some parts of the regional economy were, notably the Programme of the Basque Government and addresses Mondragon organisation, amongst the most innovative the need for a strategy of R&D specific to the tourism networks observable anywhere at the time. Third, how sector, and to further strategic research in the science of networks could some-times take the form of ‘industrial tourism within a knowledge society.
  7. 7. 470 Afr. J. Bus. Manage. Table 2. Searching for the PPINT Taxonomy. Product, Process, Organisational (front / back office), System (architectural, supply Types and Processes of Innovation chain), Conceptual Top-down (institutional)/bottom-up (entrepreneurial), caretaker (key actor who is ‘system Type of Innovation Network integrator’) versus non-caretaker (distributed network), complementary competences, changes over the life-cycle. Technological opportunities, social relations (personal likes/dislikes, social norms, Drivers/Barriers common or different rationalities of public and private sector, e.g. entrepreneurship), resources (budgets, capital), anticipated benefits, risks. Institutional factors Legal frameworks, policy push vs. local-level, regulatory environment, rules etc. Some impact indicators are set up to analyse the networking processes. Organisational control/structure, innovation performance, actual/potential impacts, Impacts and policy issues advantages/disadvantages of this specific ServPPIN. Policy implications are drawn from this case study. Source: ServPPIN []. This collaborative platform is created to: firstly, promote position in the value chain. At the launching of thethe development of new research capabilities in the network, CICtourGUNE was meant to be an interfacetourism sector and secondly, to collect the existing skills between the other players involved. That is, a linkand knowledge that could potentially be applied to between technology centres and tourism businesses. Intourism. The Cooperative Research Centre aims to be a this way, technology centres, identifying market needs innexus between the fields of technology and tourism. It terms of the technology they could offer to the tourismhas since become the main driving force in strategic industry, would be able to undertake technologicalresearch applying advanced services to tourism in the research as a pre-marketing ploy. Thus, the role ofBasque Country. CICtourGUNE is comprised of a CICtourGUNE would be to act as an interlocutor betweennetwork of agents in various areas. Participating as the Technology Centres and industry. The reality,partners in this network are public institutions, technology however, differs from the initial plans. CICtourGUNE iscentres, universities and private companies who are comprised of an important technological and humanmainly suppliers of technology and knowledge intensive infrastructure, and is strategically located at the same linkservices. CICtourGUNE currently has 28 members in the value chain as the Technology Centres.(Figures 2 and 3). CICtourGUNE is currently operating as a research CICtourGUNE takes advantage of the existing (technological) centre, in connection with the technologyexperience and know-how of the technology centres of companies and consultant firms. In this value chain, thethe Basque Country, Universities and technology-based relationship between the technology centres andbusinesses. It is these institutions that guide research CICtourGUNE is collaborative and competitive at thetoward technologies applied to tourism. However, this same link of the value chain, so logically it can give riseinitiative is not unique in Spain. Centres for the promotion to competition concerns.of innovation in the tourism sector, have existed since The organization presented here is, according to the2000. These include SEGITTUR (State Company for literature, defined as an innovation network. As noted byTourism Information Management), IBIT (Illes Balears DeBebresson and Amesse (1991), innovation networksInnovation and Technology), TECNOTUR (Technology are characterized by cooperation agreements betweenCentre of Tourism, Entertainment and Quality Life members who do not obey in a hierarchical way butAndalusia), CINNTA (Foundation Centre for Innovation in instead by cooperation based on trust and a commonTourism Andalusia) and/or ITH (Instituto Tecnológico project. "The networks are not considered innovativeHotelero in Madrid). arrangements which are robust, solid and hierarchical systems, but are instead relatively loose, informal, implicit, of easy decomposition and recombination"The provider-client technology value chain in tourism (DeBebresson and Amesse, 1991). This definition can be applied to the network built around CICtourGUNE inDuring the few years in which CICtourGUNE has which, as we shall see below, its participants havedeveloped, there has been a significant change of its formed a diverse spectrum of cooperative relationships
  8. 8. Plaza et al. 471 " #$ % # ! Figure 3. An e-tourism innovation network case study: CICtourGUNE’s strategic alliances. Source: CICtourGUNE.within an organizational structure in which its partners maintains partnerships with the Regional Developmenthave a low dependence on the network. As noted by Agency of Lower Deba, Debegesa, which has used itsNalebuff and Brandenburger (1996), low significance or services for testing new technologies (prototypes) inlack of hierarchical relationships allows network partners order to power new tourism in the cooperate on an equal level while in competition. The network exceeds the formal partners and geographical boundaries. This public-private network is evolving and expanding. In fact, the numbers of largerMeasuring CICtourGUNE as a collaborative network companies providing technology that do not belong to the CICtourGUNE network is steadily increasing. ParticularlyThe network created by CICtourGUNE comprises of both relevant are the research projects through which thenational and international heavyweight partners in the centre has established cooperation with companies suchfield of R and D in tourism. The collaboration is as Telefonica (CENIT Project) and Philips (Metaverseparticularly intense between technology centres and Project). Moreover, there are other large companies thattechnology-based companies through various research are cooperating with this network, such as the Franco-projects and contracts. Their collaboration on research Belgian ATOS, an ICT technology provider that hasprojects is basically produced in conjunction with the created a unit of tourism, and the multinational companytechnology centres VICOMTech and Robotiker. With AMADEUS, leading technology provider for the globalregard to the contracts, in some cases the initiative travel industry and tourism. CICtourGUNE may benefitcomes from companies, which demand from from the experience and technological expertise of theseCICtourGUNE a type of technology that they do not pos- large companies, regardless of the asymmetricalsess, and in other cases the initiative of CICtourGUNE is relationship between these large partners and the SMEsrequired, acting as an intermediary between companies. from the already institutionalised network CICtourGUNE.Among the companies providing technology are Innovalia As in every innovative organization, high doses of trustand its affiliates. The service providers include Araldi, are required between stakeholders, as well as a clearOpe Consultores and Eleka. Furthermore, CICtourGUNE division of roles which must be accepted by all. This
  9. 9. 472 Afr. J. Bus. Manage.avoids the problem of illicit appropriation of knowledge however, fall outside the scope of this study.and technology developed by each of the network An analysis of Figure 5 (strategic agreements) ought topartners. A feedback system is used by both sides, reveal that CICtourGUNE might well have a relativelythrough which the information can flow freely. favoured position in the network, which encompasses 28 CICtourGUNE has also established extensive strategic actors (nodes) with a maximum of 5 ties each. Thepartnerships with national and international actors from measurements of centrality are the following:different fields such as science, technology, research andtourism, and is part of several scientific networks. Among Degree: CICtourGUNE shows a degree of 1.03 out of 5CICtourGUNE` strategic alliances is Foundation IBIT s (Table 3), whereas almost all other actors have a degree(Illes Balears Innovació i Tecnología). IBIT operates as a of less than 0.5 (Table 3). CICtourGUNE which has morekey organization in the development of tourism in direct ties has greater opportunities because it hasMallorca, a leading tourism destination in Spain. IBIT has choices.focused on product development, unlike CICtourGUNEwhich has concentrated on investigation. These differentroles can be advantageous for CICtourGUNE to theextent that a symbiotic relationship is maintained. In Closeness: CICtourGUNE is closer to more nodes thanaddition, from the beginning CICtourGUNE has promoted any other node (Table 3). In other words, CICtourGUNEits incorporation into various scientific platforms, such as is able to reach other nodes through shorter path lengthseNEM (Spanish Technology Platform on Networked (closeness and farness indicators in Table 3).audiovisual technologies), INES (Spanish Initiative forSoftware and Services), and IFITT (InternationalFederation for IT and Travel and Tourism). IFITT is a Betweenness: CICtourGUNE lies between many otherleading organization for e-tourism worldwide. pairs of nodes and no other nodes lie betweenCICtourGUNE also belongs to the Scientific Committee of CICtourGUNE and other nodes (Table 3).the Journal of Information Technology and Tourism(JITT), a leading journal in eTourism. The annual ENTERconference, contributes towards building up the eTourism In addition to these centrality measurements, clusterresearch community, converting eTourism into a main coefficients (Table 4) and density measurements couldarea of research and setting up a multidisciplinary group also be calculated. The results show that there areof researchers on tourism and technology. Most several well defined clusters: On the right side of thecontributors of this group represent the core membership network graph, with a much higher density, a cluster ofof the International Federation of Information Technology the main actors of the Spanish tourism R&D scene isfor Travel and Tourism (IFITT), a world leading entity in found: Segittur, IBIT, CINNTA, Tecnotur or ITH. On theeTourism. IFITT is an independent global community for top left hand side of the graph, with a much lower density,the discussion, exchange and development of knowledge the cluster of Spanish universities is found, connected toabout the use and impact of new information and the network through the University of Deusto orcommunication technologies (ICT) in the travel and CICtourGUNE. Finally on the lower left hand side of thetourism industry. graph the cluster of foreign universities can be found. To summarize, the main Spanish tourism R&D cluster (on the right hand side of the graph) shows a much higherMeasuring the network density than the CICtourGUNE network as a whole. There is intensive cooperation within the Spanish tourismIn order to analyse the complexity of the network and the R&D cluster and we can say that CICtourGUNE seems torelationship between its actors, the following four be well connected to this cluster, which contains the mainindicators were initially used: 1) participation in scientific actors of the tourism R&D system in Spain. However,journals and conferences, 2) research and prototype there are a number of short comings in connection withdevelopment, 3) participation in research projects and 4) the links between the 2 clusters of universities and theparticipation in committees and working groups of Spanish tourism R&D cluster. On the one hand, theinternational prestige. However this paper will solely cluster of Spanish universities (on the top left hand sideconcentrate on those indicators which concern the stra- of graph 5) shows a much lower density and it alsotegic agreements. Figures 4 and 5 show the network built shows a high dependency on CICtourGUNE and thearound CICtourGUNE. It is clear that the network is much University of Deusto on their way to connection with thelarger than shown, especially if we consider that each of main Spanish R&D cluster. On the other hand, the clusterthe partners of CICtourGUNE also maintains partnerships of foreign universities (lower left hand side of the graph)with other companies through research projects and also shows a low density and a high path dependency oncontracts. These other relationships, however fall outside CICtourGUNE and ECCA (Austria).
  10. 10. Plaza et al. 473Figure 4. CICtourGUNE’s Overall Networking Dynamics (strategic research projects). Source: Own elaboration.Lastly, the Spanish R and D cluster enjoys a emphasize collaboration with partners, which are mainlydecentralized network, with several central nodes (in the technology centres and technology-based companiescentral multi-hub network), that enables a more efficient such as Innovalia (Figure 4), a joint R and D platform.transfer scheme. In contrast, in the whole CICtourGUNE Additionally, universities, technology-based companiesnetwork, there is an almost unique central node, which is and foreign institutions have a notable role in thisCICtourGUNE itself, which limits access of the 2 network. The cooperation drivers and barriers have beenuniversity clusters to the main Spanish R&D centres summarised in Table 5.cluster. These results show a clear concentration ofagents involved with CICtourGUNE. These agents arebasically three institutions: CICtourGUNE, University of ConclusionsDeusto and ECCA-Austria (Figure 5). The personalrelationship between the director of CICtourGUNE and ‘Tourism, travelling and mobility’ is a rising industry in thethe University of Deusto explains the joint work in these world economy, but its potential to innovate has not beenareas. The relationship with ECCA is based on its fully developed. Most innovations currently happenextensive research experience in e-Tourism. The projects outside of the industry and are only later adopted by
  11. 11. 474 Afr. J. Bus. Manage. Figure 5. CICtourGUNE’s Overall Networking Dynamics (strategic agreements and joint workshops). Source: Own elaboration.organizations within the tourism industry. This is partly innovation for boosting innovation in tourism SMEs, todue to the unique structure of the industry and the help clarify the tourism sector’s needs and standardizeparticular nature of its product. Tourism experiences some solutions. Table 6 summarizes strengths,consist of a variety of products and services, which need weaknesses, opportunities and threats of PPINT in theto be created, marketed and sold by a multitude of light of our research study. “Unlike market exchange,businesses. These businesses are typically small and do exchange in a network is characterised by giving innot engage in research and development-related exchange for an uncertain return (uncertain with respectactivities, or at least not to the extent common in other to when, how much and even who). Networks function onindustries. While collaboration is necessary and the basis of trust and reciprocity” (European Commission-implemented in some areas, collaborative efforts in Directorate-General for Enterprise and Industry, 2008). Intourism are still limited, despite the great need for any case, it seems that PPINT effectiveness to transferknowledge sharing and cooperation in order to effectively innovation to tourism SME-s depends critically on thesell tourism experiences and destinations. knowledge intensive business services (KIBs) involved in This work presents a preliminary approach to Public- the PPINT. KIBs sector includes many R&D intensivePrivate Innovation Networks in Tourism (PPINT) through firms that provide services to tourism firms, such as ICTs,a case study: CICtourGUNE. Public-Private Innovation software development, R&D, and non-technological inno-Networks in Tourism (PPINT) are an organizational vations, which contribute to the upgrading of the tourism
  12. 12. Plaza et al. 475Table 3. CICtourGUNE Network Centrality Indicators. Degree: Normalized Farness: Closeness: Betweenness: No. of ties Eigenvalues No. of ties Normalized Scores Normalized ScoresCICtourGUNE 1.03 0.522 27 1.00 0.454Robotiker 0.44 0.311 43 0.62 0.009Basquetour 0.25 0.170 48 0.56 0University of Deusto 0.48 0.264 42 0.64 0.04Noski Consulting Group 0.25 0.170 48 0.56 0Vicomtech 0.44 0.311 43 0.62 0.009ITH 0.59 0.409 39 0.69 0.027Segittur 0.44 0.320 43 0.62 0.014Tecnotur 0.48 0.361 42 0.64 0.005IBIT 0.48 0.361 42 0.64 0.005CINNTA 0.37 0.289 45 0.60 0CDTI 0.37 0.289 45 0.60 0EC3, Austria 0.40 0.291 44 0.61 0.009ECCA, Austria 0.74 0.452 35 0.77 0.096OMT 0.22 0.082 49 0.55 0UOC 0.48 0.340 42 0.64 0.014Alcala Univ 0.44 0.338 43 0.62 0.004Balearic Islands Univ 0.25 0.102 48 0.56 0.001Univ Oviedo 0.25 0.102 48 0.56 0.001Univ Cadiz 0.25 0.102 48 0.56 0.001Vienna University of Technology 0.07 0.045 53 0.50 0University of Applied Sciences 0.25 0.134 48 0.56 0Worms (Germany)Univ. of Applied Sciences 0.25 0.134 48 0.56 0Ravensburg Weingarten(Germany)COTEC 0.29 0.128 47 0.57 0.005x + o Business Solutions GmbH 0.37 0.196 45 0.60 0.011(Austria)eCTRL Solutions 0.22 0.154 49 0.55 0Afidium (France) 0.25 0.134 48 0.56 0Standards Norway 0.25 0.134 48 0.56 0 Table 4. CICtourGUNE Network Cluster Indicators. Clustering coefficients No. of pairs CICtourGUNE 0.42 351.00 Robotiker 1.40 55.00 Basquetour 1.86 15.00 University of Deusto 0.81 66.00 Noski Consulting Grou 2.06 15.00 Vicomtech 1.41 55.00 ITH 1.14 105.00 Segittur 1.61 55.00 Tecnotur 1.56 66.00 IBIT 1.56 66.00
  13. 13. 476 Afr. J. Bus. Manage. Table 4. Cont’d CINNTA 2.41 36.00 CDTI 2.41 36.00 EC3, Austria 1.60 45.00 ECCA, Austria 0.83 171.00 OMT 1.00 10.00 UOC 1.51 66.00 Alcala Univ 1.94 55.00 Balearic Islands Univ 1.06 15.00 Univ Oviedo 1.06 15.00 Univ Cadiz 1.06 15.00 VUT 0.00 University of Applied Sciences (Germany) 1.33 15.00 Univ. of Applied Sciences (Germany) 1.33 15.00 COTEC 1.00 21.00 x+o Business Solutions GmbH (Austria) 0.86 36.00 eCTRL Solutions 1.90 10.00 Afidium (France) 1.33 15.00 Standards Norway 1.33 15.00 Table 5. CICtourGUNE consortium: Cooperation to develop strategic research towards tourism. Service activity R&D partnership in eTourism, eTravelling, Heritage and Creativity; ICT; Pushing ahead strategic research in tourism sciences; Knowledge-sharing and Type of innovation technology transfer. Product, process and organisational types of innovation. CICtourGUNE has 28 partners (Figure 3): consulting companies, destination management partnerships, universities, technology centres, ICT technology suppliers, tourism companies, and development agencies. Top-down (institutional). Type of innovation network One main caretaker (system integrator): strong leadership. Business model innovation (innovative strategies) requires strong leadership as it often calls for substantial trade- offs. The network exceeds the formal partners and geographical boundaries (Figures 4 and 5). New tourism in Bilbao as a result of the Guggenheim Museum. The Internet is decoupling the tourism value chain. The tourism industry is highly dependent on ICT technologies. The level of trust in a tie is crucial, as elsewhere. Drivers / Barriers Technology providers: Key actors in the process (Figures 4 and 5). Caretakers ability to spot and recruit talented people. Capacity building within the network. Elements outside the CICtourGUNE play an active role in the networking process (Figures 4 and 5).
  14. 14. Plaza et al. 477 Table 5. Cont’d Strategically placed ties can dramatically increase network effectiveness (Figure 5). Technology supplier SME partners have well established R&D structures (e.g. Innovalia). CICtourGUNE acts as a contract research centre for consultants-partners and technology suppliers-partners: CICtourGUNE accounts for part of the R&D expenditure of these companies. An Innovation appropriation regime: Difficult to appropriate the cash-flows of knowledge products. Building up win-win relationships is required. Institutional factors Initiative surrounded by a systemic networking environment (a Regional Innovation System). Impacts and policy issues The etourgune strategy has been institutionalised into a R&D body called CICtourGUNE.Table 6. Public-Private Innovation Networks in Tourism (PPINT) overview. Strengths Weaknesses PPINT-type initiatives should be supported by a systemic An innovation appropriation regime: difficult to appropriate thenetworking environment (for example, a Regional Innovation cash-flows of knowledge products and to avoid the illicitSystem). This enables quicker access to resources and know-how appropriation of knowledge and technology. Building up win-winthat cannot be time-effectively/cost-effectively produced internally relationships is required.(that is, transaction costs). The private sector takes an increasing active role as the network Expectations should be managed from the beginning: all theevolves. Technological SMEs should have a well established R stakeholders must accept a clear division of roles. Thisand D umbrella structure which allows fast changes in the contributes to the lessening of’s life-cycle. A high degree of dependence on public resources. Regional Elements outside the Network can play an active role in the Government plays a key role in financing Tourism Innovationnetworking process. The networking exceeds the formal partners consortia.and geographical boundaries. It is important to give priority to developing technology transfer A remarkably small number of strategically placed ties can organizations and structures, in order to nurture systemicdramatically increase the effectiveness of the network. public-private strategic cooperation. The SMEs’ effectiveness in the network depends mainly on the SMEs’ joint R and D structures (R and D umbrellas). Support for SMEs is requested to set up effective R and D structures. Commitment: the higher the commitment of the network partners,the more resources (money, effort and time) they are prepared to When the innovation network is top-down (institutional) ratherput into the joint programmes. than bottom-up, innovation can not respond to markets needs. Coordination-oriented ICT infrastructures within the innovation Some networks lack the necessary competence to interactnetwork can reduce the need for coordination (and thus effectively within the network: this requires capacity buildingtransaction costs). (instruction and training) Strategic alliances must be nurtured by networking: networking is Network lock-in: network members become unable to use otherlearnt through networking. innovation infrastructures without substantial switching costs
  15. 15. 478 Afr. J. Bus. Manage.Table 6. Cont’d Public sector entrepreneurs and private sector entrepreneurs are required Strategic alliances must be nurtured by networking: networking islearnt through networking. Transfer of knowledge to the production sector needs to be more systematically organised: transfer structures must “catalyse stakeholders`potential for innovation”. Public policy makers, research centres, and educational institutions should provide strong support to PPINT. Opportunities Threats Upgrading innovation related knowledge-skills and diffusing them Can cooperation have a negative impact on the PPINT actors?among PPINT members Can PPINT fail because of missing links between agents (for example, missing information transfer)? Missing links may be due to:Enabling locally-developed small-scale innovations. poor selection mechanismsPeer coaching becomes more effective than training. lack of specific competences misalignment of incentives lack of information transparency lack of specific intermediaries (for instance, KIBS) Shared innovation effects: learning curve effects can be reinforced Can PPINT fail because of lack of openness (for example, ato the extent that two or more actors (network nodes) share temptation to monopolise returns that may lead to ‘lock-in’)?experience, knowledge and know-how. Opportunism can hinder the PPINT` effectiveness either s because of: previous adverse experiences Experience curve effects: density of interaction within the network asymmetrical appropriation of the PPINT generated value, orcan report innovation management efficiency gains as a misalignment of incentivesconsequence of more accelerated “learning curves”. mismatched expectations lack of shared experience cultural barriers Standardization: as innovation sequences (mostly technology- Innovation-oriented experience-curves can come to a suddendriven innovations and subsequent learning processes) become end when the network is not producing the marketing mix thatmore standardized, networking efficiency can increase the market values. Successful innovations occur at the boundaries of the PPINT, A decentralized network of managers’ structure is requestedwhere the needs and challenges of innovation users and the for effective transfer of knowledge to network partners. Severalpotential of the innovations can be connected together, in an central managers (multi-hub networks) are necessary forinspiring process that expands beyond both the PPINT insiders effective cooperation.and outsiders. Networking effectiveness relies heavily on sharing tacit Network managers must strike and follow up network membersknowledge. Effective transfer of tacit knowledge requires intensive decisively (especially SMEs and micro-firms).personal contact. Knowledge Intensive Business Services (KIBS) can play a key Sharing the Vision: a long term strategic planning perspectiverole in transferring innovation to SMEs (Figure 6). should be shared by the network stakeholdersPPINT can create a favourable environment for innovation.
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