Research examines how entrepreneurs overcome innovation barriers
In tourism as in other industries, managers and entrepreneurs are always looking for new opportunities, novel ways of doing things, and innovations that can exploit gaps in the market or create new business opportunities. From online travel agents to the explosion of the ‘sharing’ economy, new technologies and business models have led to some of the largest and fastest growing travel and tourism businesses. But how much do we know about the process of innovation, and what barriers exist to new entrants into the tourism industry? A paper published online in Current Issues in Tourism describes how new tourism entrepreneurs have to use initiative and hard work -- and often work for nothing -- to overcome the barriers in setting up their innovation.
The researchers from the University of Surrey and University of Alicante described the research as vital because the innovation by entrepreneurs who are "new to tourism" is poorly understood.
First author Dr Rodriguez-Sanchez said: "We were really interested in this essential area of research as we wanted to show that the innovation process in services, especially by new to tourism entrepreneurs, is a complex and experimental one.
"The tourism entrepreneurs face many challenges and successfully overcame them by being highly dynamic and market-driven. We wanted to highlight how they succeeded doing this in an uncertain process."
Research on tourism innovation (see Gomezelj, 2016 for a recent systematic review), according to Rodriguez-Sanchez et al., has focused mostly on the inputs into (investment, knowledge, actors, etc.) and especially the outputs from (nature and types of innovation, impact on performance, etc.) the ‘black box’. The aim of the current paper is to focus on the innovation process itself. The paper initially reviews the existing tourism and generic literature about the characteristics of, and main tasks in, the innovation journey. It aims to bring together disparate aspects of the innovation process contemplated in different strands of the literature (both innovation and entrepreneurial) into a single framework. This framework is then is explored through a systematic analysis of the tourism innovation journey of 24 new-to-tourism entrepreneurs establishing start-ups in Spain. The analysis draws on the innovators’ narrations about their distinctive journeys to provide a more holistic picture of the innovation process.
The paper says that entrepreneurs use creative strategies to overcome challenges and succeed despite their lack of financial and human resources. To keep afloat they can save money by running the business from home, "share" employees with other companies, offer a share of the business in return for specialist advice, and as business owners work for less than market rates.
Another of the entrepreneurs' key strategies to overcome the lack of resources was building ties and networks with different stakeholders, to ensure that the innovations are successfully developed and implemented.
The research revealed some of the obstacles the entrepreneurs had to overcome. These included some areas of the tourism industry being behind the times when it came to using technology, which empowered the entrepreneur to apply technological knowledge to attract customers.
Another issue for the entrepreneurs, who often had little or no relevant background in tourism, included getting the customer to adopt new technology that the industry was not familiar with, and ensuring acceptance of the innovation, for example by offering free trials. This often overcame the consumer resistance.
This might include using apps to order food in a restaurant, to decide at a ski resort whether or not to ski that day, or to obtain unused hotel parking spaces when commuting.
The entrepreneurs' other successful techniques included ensuring that the customer was an integral part of the design of the product from the early days of the innovation process, and being flexible to the customers' needs.
The research showed that entrepreneurs needed particular characteristics and approaches to succeed, including using experimenting with their approach early in the process, and working with a functionally diverse team to utilise plenty of different skills. Another successful approach included carrying out many development activities concurrently rather than in a set sequence, to overcome problems as soon as they were encountered.
Dr Rodriguez-Sanchez said: "This research sheds more light on how entrepreneurs are successfully using technology to transform the tourism sector despite any potential consumer resistance.
"It highlights that entrepreneurs have to work hard to get their ideas to the market -- but with perseverance and hard work they will successfully introduce innovations that make an impact in the tourism sector."
The bibliographic database search de:(tourism OR "tourism development" OR "tourist industry") AND innovation currently finds over 1200 records. To focus on the innovation process and techniques, try adding de:methodology to the search, which narrows results down to 120 records. A small selection of studies on innovation is listed below.
Reference
Isabel Rodriguez-Sanchez, Allan M. Williams, Matilde Brotons. The innovation journey of new-to-tourism entrepreneurs. Current Issues in Tourism, 2017; 1 DOI: 10.1080/13683500.2017.1334763