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African Journal of Business Management Vol. 5(2), pp. 464-480, 18 January, 2011 Available online at http://www.academicjournals.org/AJBM ISSN 1993-8233 ©2011 Academic Journals Full Length Research Paper

Orchestrating 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.

INTRODUCTION The ICTS revolution and technological innovations in e-tourism E-Tourism, or travel technology, is an expression employed to express the application of Information and Communications Technology (ICT), to the travel, tourism and hospitality industries. Growth in ICTs encompasses changes in business practices and strategies, as well as industry structures. In fact, ICT technologies are decoupling the tourism value chain. The Internet is altering the industry structure (Porter, 2001) by changing barriers to entry, minimising switching costs, transforming distribution channels, making possible price transparency and competition and affecting differentiation and cost structures. In fact, the tourism industry is taking a lead in e-Commerce applications. Business model innovation is world. Advances in ICTs have accelerated a recent interest in business model innovation in the tourism *Corresponding author. E-mail: [email protected]. Tel: +34 946013641. Fax: +34 946017087.

becoming one of the main forces steering strategic renewal efforts of tourism-related businesses around the sector. Of course, not all tourism-related businesses model innovations are ICT driven, even though present strategic planning figures to a great extent in ICT-related business model innovations. The recipe to success lies in the fast recognition of buyer needs and in supplying prospective clients with wide-ranging, customized and up-to-date products and services that suit their wants. Travellers demand websites to be informative and useful, interactive and appealing. The advancement in ICT-s has empowered the present-day tourist who is becoming well-informed and is searching for distinctive value for time and money.

Buhalis (2008) stated that, “potential tourists have become more independent and sophisticated on using a wide range of tools to arrange for their trips. These 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 visitbritain.com), social networking and web 2.0 portals (such as Wayn and Tripadvisor), price comparison sites (such as Kayak or

Kelkoo) as well as individual suppliers and intermediaries sites”. Still, the European Commission through its Information Society Technologies Advisory Group (ISTAG) in relation to strategic trends of European ITC research shows that current research within the domain of communications and information technologies (ICTs) when applied to tourism is complex and extremely difficult and that the improvement made in this field of expertise is still insufficient (ISTAG, 2009). ICT technologies are decoupling the tourism, travelling and mobility value chain. The Internet is changing the industry structure by altering barriers to entry, reducing switching costs, transforming distribution channels, making possible price transparency and competition and affecting cost structures. In this context, there is an urgent need for innovation networking to support the tourism industry. Thus, to support this fact, this article explores an innovation network in e-Tourism using a case study in Spain. In the following paragraphs the reasons why the tourism sector and Spain have been selected are explained in detail. Why the tourism sector? Tourism is one of the fastest growing and largest industries worldwide. According to the World Tourism Organization (UNWTO), in 2009, international tourist arrivals reached 880 million. UNWTO's ‘Tourism 2020 Vision’ forecasts that international arrivals are expected to reach nearly 1.6 billion by the year 2020 (Figure 1). Furthermore, the tourist industry has become global, with its major players extending their cooperation to reach local SMEs (management contracts, branding, global reservation systems, franchising). Why Spain? The World Tourism Organization reports the most visited countries from 2006 to 2009 by the number of international travellers. The top visited countries from 2006 to 2009 are France, United States and Spain. France continues to lead the ranks in terms of tourist arrivals (with 74.2 million tourists in 2009), followed by the USA (54.9 million international visitors) and Spain (52.2 million international tourist arrivals). Worldwide, international visitors declined by 4.3% in 2009. Despite this overall decline, France, the USA, Spain, China and Italy retained their positions as the top 5 destinations.

In 2001, Spain overtook the US as the second leading travel destination in the world. However, 2008 witnessed Spain losing its second place to China and the US, due to its maturing tourist market, fierce competition among the destinations combined with fierce competition among tourism service providers, and dramatic changes in consumer behaviours and technologies. Recent technological advances have led to the appearance of new players in the industry; new players in the value chain have arisen and strategic alliances have become critical to competition on a global scale. In order to solve these competitive tensions, Spain is developing its travel and tourism industry by (1) diversifying its travel and tourism industry, which no longer focuses just on sandy

Plaza et al. 465 beaches and sunny weather, but also by (2) promoting new tourism-related business models that arise as a result of the new ICT-s; and (3) by setting up tourism-related Innovation systems.

In this context, there is an urgent need for investment and innovation to support the tourism industry. The Spanish government is implementing a long-standing policy to target the high-end of the market by promoting innovation. Spanish policy makers have prioritized the tourism sector significantly and the regional authorities are not an exception in this regard. Much emphasis has been placed on the importance of public-private innovation partnerships as a backbone to this city/ regional growth. The aim of this paper is to investigate significant patterns of effective innovation within “Knowledge Intensive Services for Private-Public Innovation Networks in e-Tourism” through a case study: CICtourGUNE, a Competence Research Centre for tourism, set up to foster interaction between the different actors in the Tourism Innovation and (or) e-Travelling innovation field. It currently has 28 partners, which include consulting companies, destination management partnerships, universities, technology centres, ICT technology suppliers, knowledge intensive business services (KIBS), tourism companies and development agencies. Why CICtourGUNE? Tourism is a particularly complex industry which involves a set of activities aimed at attracting visitors to a geographical area, receiving these visitors and satisfying their demands. It encompasses transportation; services in the place of origin (travel agencies, tour operators, online information services); residential infrastructures (hotels, apartments, second homes, camp sites); and services at the place of destination (banking, accommodation, foodservice, leisure, sports, culture, health care, insurance or security). All these services articulate a highly complex value chain, and it is for this reason that networking becomes a critical fundamental of tourism firms aiming to maintain and improve their competitive position. It is also for this reason that CICtourGUNE, an innovation network for tourism, was set up. Centres for the promotion of innovation in the tourism sector have existed since 2000 in Spain. These include SEGITTUR (State Company for Tourism Information Management), IBIT (Illes Balears Innovation and Technology), TECNOTUR (Technology Centre of Tourism, Entertainment and Quality Life Andalusia), CINNTA (Foundation Centre for Innovation in Tourism Andalusia) and/or ITH (Instituto Tecnológico Hotelero in Madrid). Different from these research centres, CICtourGUNE has appeared as a strategic R&D network within a sector in which networking and cooperation among stakeholders has turned into a vital feature of sustained and sustainable development. It is for this reason that this work analyses the case of CICtourGUNE. The aim of this article is to evaluate CICtourGUNE’s networks and to describe how networks

466 Afr. J. Bus. Manage.

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Figure 1. UNWO Tourism Vision 2020 (international arrivals). Source: WTO (2001a; b).

with elements literally outside CICtourGUNE play an active role in the networking process. TOURISM INNOVATION The technological innovation vs. the non-technological innovation dilemma Tourism innovation usually begins when governments prioritize the tourism sector significantly, and the country makes a significant effort to attract tourists through robust destination-marketing campaigns and by ensuring their attendance at many international tourism fairs (Blanke and Chiesa, 2009). In other words, up until now public authorities have made huge efforts to strengthen the demand side of the equation, whereas the supply side of the equation has remained untouched. In this context, innovation is seen as a priority as it attempts to overcome the challenges associated with conventional tourism. However, let us define innovation more clearly: An innovation is the implementation of a new or significantly improved product (good or service), or pro-cess, a new marketing method, or a new organizational method in business practices, workplace organization or external relations. The minimum requirement for an innovation is that the product, process, marketing method or organizational method must be new to (or significantly improved for) the firm. Innovative activities are all scientific, technological, organizational, financial and commercial steps which actually do, or are intended to, lead to the implementation of innovations. Innovative

activities also include R&D that is not directly related to the development of a specific innovation. An innovative firm is one that has implemented an innovation during the period under review (Oslo, 2005). Table 1 summarizes the principal types of innovation. The tourism sector encompasses a myriad of non-technological innovations (for example, marketing innovations and/or organizational innovations). In fact, tourism firms place more emphasis on non-technological innovations than manufacturing firms. These non-technological innovations, however, are hard to measure since innovation statistics are still strongly orientated towards technological innovations. Measurement of output, factor and knowledge inputs in tourism is one of the key areas where initiatives are needed.

The tourism innovation agenda for the future requires statistical innovation. There is also a need to better understand the specificities of innovation in tourism (European Commission, 2007) and to support all forms of innovation, not only technological innovation (Gallouj and Weinstein, 1997). To develop and test new policy approaches in support of innovation in tourism and thus to target innovation in tourism policy as well as to promote trans-national cooperation, can all help to foster the tourism innovation agenda. Non-technological innovations in tourism: The public-private innovation networks in tourism (PPINT) From the traditional perspective of industrial policy, tech-nology becomes the main driver for economic innovation.

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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 of innovation dynamics and typologies, is mostly tech-nology focused. However, a recent and growing literature shows how non-technological innovations are becoming crucial (for instance, learning through practice), and the tourism sector is not an exception in this regard (Sundbo, Orfila-Sintes and Sørensenc, 2007). Non-technological innovations in services can also arise from investment in intangible inputs (for example, strategic networking). Changes in people’s tastes and behaviour are (also) responsible for changes in products and services (European Commission, 2008). Much emphasis has been placed on the importance of public-private innovation partnerships as a backbone to regional growth. Case study research points out that some particular regions have a competitive advantage in innovation partnerships over others, yet we have little by way of a satisfactory means of formally studying the networking patterns of these partnerships to demonstrate how the specific case studies fit into a larger pattern of effective innovation that can be applied to more than one place. Nodes and networks characterize all important innovating phenomena; interaction, mobility and intangible elements are becoming increasingly important. However, what are the conditions required for Public-Private Knowledge Intensive Business Services Networks to become effective innovation partnerships? Are the Knowledge Intensive Services for Private-Public Innovation Networks in Tourism themselves in fact exhibiting robust and

significant patterns? What do the patterns look like? PPINT become effective innovation engines to the extent that they reduce the innovation transaction costs between at least two actors (nodes or elements) in the network. There is clearly room to improve the way in which we facilitate and support services, R&D and innovation as part of a wider innovation system.

The tourism industry is highly dependent on public-private innovation partnerships in Information and Communication Technologies (ICTs), thus making technological innovations critical for establishing competitive advantages (Werthner and Klein, 1999). Yet most innovations currently happen outside of the industry and are only later adopted by organizations within the tourism industry (Plaza et al., 2009). This is partly due to the unique structure of the industry and the particular nature of its products. Tourism experiences consist of a variety of products and services, which need to be created, marketed and sold by a multitude of businesses. These businesses are typically small and do not engage in research and development-related activities, or at least not to the extent common in other industries. While colla-boration is necessary and implemented in some areas, collaborative efforts in tourism are still limited, despite the great need for knowledge sharing and cooperation in order to effectively sell tourism experiences and destina-tions (Wang and Fesenmaier, 2007; Novelli et al., 2006).

Research on innovation networks in the tourism industry is still at a early stage but the already existing

468 Afr. J. Bus. Manage. literature has identified various loci of innovation in tourism (Hjalager, 2002) and has examined innovation at the destination level (Stamboulis and Skayannis, 2003; Volo, 2005), within the hotel industry (Weiermair et al., 2005; Orfila- Sintes et al., 2005) as well as within other small and medium sized tourism enterprises (Pikkemaat and Peters, 2005; Pikkemaat and Weiermair, 2007). Innovation in tourism services is widely accepted as a value generating activity that is particularly important in creating an advantage for tourism destinations in com-petition with other destinations (Hjalager, 2002; Ritchie and Crouch, 2000; Volo, 2005). As noted by Barras (2000) and Hjalager (2009), distinguishing innovation types is not necessarily simple, since innovation in one field leads to subsequent innovations in others.

Several articles on knowledge transfer in connection with innovation have been published by the ‘African Journal of Business Management’ in recent years: Singh and Singh (2009) try to develop an understanding of the changes in innovation in services, from technology adoption to complex complementary changes in technologies, skills and organization. Chuang et al. (2010) discuss the analytical typology of organizational innovation in the service industry. Phambuka-Nsimbi (2010) reviews the literature on clusters and their contribution to building a competitive advantage for service businesses. Khan et al. (2009) explore the moderating role of organizational size in the relationship between transformational leadership and organizational innovation. However, the analysis of an innovation net-work for e-Tourism is a novelty for the whole discipline.

CICtourGUNE as a Public-private Innovation Network in Tourism (PPINT) constitutes an organizational innovation for boosting innovation in e-Tourism (Figures 2 and 3). Therefore, it is an example of non-technological innovation, although at the same time, some of its partners are actually involved in creating technological innovations.

In this paper, CICtourGUNE is approached using the methodology set up by ServPPIN [http://www.servppin.com/] and then the empirical results of this subsequent innovative networking in tourism are explained. Public-private innovation networks in tourism (PPINT): A case study Public-Private Innovation Networks in Tourism (PPINT) is an organizational innovation for boosting innovation in the tourism sector. METHODOLOGY In this paper, the common methodological framework developed within the ServPPIN project [http://www.servppin.com/] is used for

exploring the CICtourGUNE public-private innovation network in knowledge intensive services. There are ‘5 core dimensions’ by which each case-study can be categorized. In addition, there are some key features to specify different alternatives/variants along each of the 5 dimensions. These 5 dimensions come from ServPPIN’s [http://www.servppin.com/] previous theoretical and empirical understanding of public-private innovation networks: Although limited in number, these 5 core dimensions are in accor-dance with a number of common issues with innovation networks (Sundbo, 2010): Static and dynamic patterns of PPINT, factors influencing their evolution, key factors that determine success at an early stage of the life cycle, leadership and innovation, key actors, what are the governance structures, which are the PPINT innovation appropriation regimes, potential impacts and policy implications (ServPPIN, 2009). The aim of this common framework is to generate generic knowledge about private/public networks and service innovation, applicable to other case studies worldwide (Table 2).

This research is based on in-depth interviews in the field, of the CICtourGUNE network partners. Semi-structured qualitative interviews were carried out with R and D managers from CICtourGUNE, firms (consulting companies, technology suppliers and tourism firms), universities, technology centres, development agencies and destination marketing organizations (mostly public-private partnerships) belonging to the network (Figure 2).

In the case of the CICtougune technology-transfer agency, the institutional context influences the whole of the innovation and diffu-sion process. It is for this reason that we devote the next section to the study of the Basque Regional Innovation System (RIS). Institutional factors that support the CICtourGUNE PPINT: A rich systemic networking environment How does the institutional context influence the innovation and diffusion process? Are regional and national differences important? Innovation was seen as a priority as it attempted, in the case of Bilbao, to overcome the challenges associated with an old-industrialized economy. In the 1970s, 1980s and early 1990s, the Basque Country went through a very severe crisis; the situation of a deep recession, marked by uncertain elements (unemployment, socio-political instability, loss of a reference point in social values and so on) that required urgent industrial restructuring. To reverse these negative dynamics, the Basque Government made a huge effort to build a regional innovative infrastructure to support the modernisation of its traditional industries and nurture new industrial and service activities. Technological Centres and Parks were created in the 1980s as a response to the necessity to upgrade the level of technology of the obsolete Basque production structure.

In the 1990s a new demand-driven policy, rather than a top-down 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, 2005). Independent R&D units within firms, new research centres, certification and testing labs, sectoral centres and Universities were grouped under a common association called SARETEK (the Basque Science, Technology and Innovation Network) at the request of the Basque Government. Clusters and cluster-driven policies took the lead in the new demand oriented technology policy 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, official representatives of Basque management and employees and all kinds of organisations connected with innovation. Innobasque has taken the lead in the new innovation networking driven policy, hence dissolving the old SARETEK. The creation of Innobasque

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Figure 2. An e-Tourism Innovation Network Case Study: CICtourGUNE’s partners. Source: CICtourGUNE.

shows that the regional government is paying increasing attention to the challenges of knowledge transfer to SMEs (Olazaran et al., 2009). Private-public networks and nodes characterise all significantly connected innovative phenomena, and point to a rich innovation infrastructure.

As part of these efforts, a number of cooperative research centres (CICs) have been set up to strengthen strategic public-private networking. At present, there are CICs for nano-technology and nano-science, high-performing manufacturing and energy, microsystems, biomaterials and biotechnology and lastly, for tourism innovation, a network called CICtourGUNE.

Philip Cooke (2008), an authority on Regional Innovation Systems (RIS), underlines that “three key factors were visible [for the Basque Country]: first, how a de-industrialising region depended upon possessing intermediary agencies with innovation and industry expertise, independent of the government (though part-funded by so-called generic project-funding distributed by the Basque government) and of the then new and not significantly research active university sector. These aspects would project Basque industry into a new future different from the disappeared heritage of steel-making and ship-building. Second, how systemic in terms of networking connectivity the whole and particularly some parts of the regional economy were, notably the Mondragon organisation, amongst the most innovative networks observable anywhere at the time. Third, how networks could some-times take the form of ‘industrial

districts’ or innovative clusters which, although composed of micro-firms and small-to-medium ones, could nevertheless exert global reach”. (Cooke, 2008).

Analysis of a case study: The CICtourGUNE strategic network Tourism experiences consist of a complex variety of products and services, which need to be supplied by a myriad of companies. In this context of multitude businesses within the tourism value chain, much emphasis is being placed on the relevance of strategic networking as a backbone for sustained competitiveness. The centre for cooperative research in Tourism, CICtourGUNE, is a graphic example of that strategy research. CICtourGUNE was set up in 2006 in the city of San Sebastian (Basque Country, Spain), through the collaboration of the Basque Government, the Technology Corporation Tecnalia, Vicomtech Technology Center and the University of Deusto. Its origin is based on the Competitiveness and Social Innovation 2006-2009 Programme of the Basque Government and addresses the need for a strategy of R&D specific to the tourism sector, and to further strategic research in the science of tourism within a knowledge society.


Table 2. Searching for the PPINT Taxonomy.

Types and Processes of Innovation Product, Process, Organisational (front / back office), System (architectural, supply chain), Conceptual

Type of Innovation Network Top-down (institutional)/bottom-up (entrepreneurial), caretaker (key actor who is ‘system integrator’) versus non-caretaker (distributed network), complementary competences, changes over the life-cycle.

Drivers/Barriers Technological opportunities, social relations (personal likes/dislikes, social norms, 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.

Impacts and policy issues

Some impact indicators are set up to analyse the networking processes. Organisational control/structure, innovation performance, actual/potential impacts, advantages/disadvantages of this specific ServPPIN. Policy implications are drawn from this case study.

Source: ServPPIN [http://www.servppin.com].

This collaborative platform is created to: firstly, promote the development of new research capabilities in the tourism sector and secondly, to collect the existing skills and knowledge that could potentially be applied to tourism. The Cooperative Research Centre aims to be a nexus between the fields of technology and tourism. It has since become the main driving force in strategic research applying advanced services to tourism in the Basque Country. CICtourGUNE is comprised of a network of agents in various areas. Participating as partners in this network are public institutions, technology centres, universities and private companies who are mainly suppliers of technology and knowledge intensive services. CICtourGUNE currently has 28 members (Figures 2 and 3).

CICtourGUNE takes advantage of the existing experience and know-how of the technology centres of the Basque Country, Universities and technology-based businesses. It is these institutions that guide research toward technologies applied to tourism. However, this initiative is not unique in Spain. Centres for the promotion of innovation in the tourism sector, have existed since 2000. These include SEGITTUR (State Company for Tourism Information Management), IBIT (Illes Balears Innovation and Technology), TECNOTUR (Technology Centre of Tourism, Entertainment and Quality Life Andalusia), CINNTA (Foundation Centre for Innovation in Tourism Andalusia) and/or ITH (Instituto Tecnológico Hotelero in Madrid). The provider-client technology value chain in tourism During the few years in which CICtourGUNE has developed, there has been a significant change of its

position in the value chain. At the launching of the network, CICtourGUNE was meant to be an interface between the other players involved. That is, a link between technology centres and tourism businesses. In this way, technology centres, identifying market needs in terms of the technology they could offer to the tourism industry, would be able to undertake technological research as a pre-marketing ploy. Thus, the role of CICtourGUNE would be to act as an interlocutor between the Technology Centres and industry. The reality, however, differs from the initial plans. CICtourGUNE is comprised of an important technological and human infrastructure, and is strategically located at the same link in the value chain as the Technology Centres. CICtourGUNE is currently operating as a research (technological) centre, in connection with the technology companies and consultant firms. In this value chain, the relationship between the technology centres and CICtourGUNE is collaborative and competitive at the same link of the value chain, so logically it can give rise to competition concerns.

The organization presented here is, according to the literature, defined as an innovation network. As noted by DeBebresson and Amesse (1991), innovation networks are characterized by cooperation agreements between members who do not obey in a hierarchical way but instead by cooperation based on trust and a common project. "The networks are not considered innovative arrangements which are robust, solid and hierarchical systems, but are instead relatively loose, informal, implicit, of easy decomposition and recombination" (DeBebresson and Amesse, 1991). This definition can be applied to the network built around CICtourGUNE in which, as we shall see below, its participants have formed a diverse spectrum of cooperative relationships

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Figure 3. An e-tourism innovation network case study: CICtourGUNE’s strategic alliances. Source: CICtourGUNE.

within an organizational structure in which its partners have a low dependence on the network. As noted by Nalebuff and Brandenburger (1996), low significance or lack of hierarchical relationships allows network partners to cooperate on an equal level while in competition. Measuring CICtourGUNE as a collaborative network The network created by CICtourGUNE comprises of both national and international heavyweight partners in the field of R and D in tourism. The collaboration is particularly intense between technology centres and technology-based companies through various research projects and contracts. Their collaboration on research projects is basically produced in conjunction with the technology centres VICOMTech and Robotiker. With regard to the contracts, in some cases the initiative comes from companies, which demand from CICtourGUNE a type of technology that they do not pos-sess, and in other cases the initiative of CICtourGUNE is required, acting as an intermediary between companies. Among the companies providing technology are Innovalia and its affiliates. The service providers include Araldi, Ope Consultores and Eleka. Furthermore, CICtourGUNE

maintains partnerships with the Regional Development Agency of Lower Deba, Debegesa, which has used its services for testing new technologies (prototypes) in order to power new tourism in the region.

The network exceeds the formal partners and geographical boundaries. This public-private network is evolving and expanding. In fact, the numbers of larger companies providing technology that do not belong to the CICtourGUNE network is steadily increasing. Particularly relevant are the research projects through which the centre has established cooperation with companies such as Telefonica (CENIT Project) and Philips (Metaverse Project). Moreover, there are other large companies that are cooperating with this network, such as the Franco-Belgian ATOS, an ICT technology provider that has created a unit of tourism, and the multinational company AMADEUS, leading technology provider for the global travel industry and tourism. CICtourGUNE may benefit from the experience and technological expertise of these large companies, regardless of the asymmetrical relationship between these large partners and the SMEs from the already institutionalised network CICtourGUNE. As in every innovative organization, high doses of trust are required between stakeholders, as well as a clear division of roles which must be accepted by all. This

472 Afr. J. Bus. Manage. avoids the problem of illicit appropriation of knowledge and technology developed by each of the network partners. A feedback system is used by both sides, through which the information can flow freely.

CICtourGUNE has also established extensive strategic partnerships with national and international actors from different fields such as science, technology, research and tourism, and is part of several scientific networks. Among CICtourGUNE s̀ strategic alliances is Foundation IBIT (Illes Balears Innovació i Tecnología). IBIT operates as a key organization in the development of tourism in Mallorca, a leading tourism destination in Spain. IBIT has focused on product development, unlike CICtourGUNE which has concentrated on investigation. These different roles can be advantageous for CICtourGUNE to the extent that a symbiotic relationship is maintained. In addition, from the beginning CICtourGUNE has promoted its incorporation into various scientific platforms, such as eNEM (Spanish Technology Platform on Networked audiovisual technologies), INES (Spanish Initiative for Software and Services), and IFITT (International Federation for IT and Travel and Tourism). IFITT is a leading organization for e-tourism worldwide. CICtourGUNE also belongs to the Scientific Committee of the Journal of Information Technology and Tourism (JITT), a leading journal in eTourism. The annual ENTER conference, contributes towards building up the eTourism research community, converting eTourism into a main area of research and setting up a multidisciplinary group of researchers on tourism and technology. Most contributors of this group represent the core membership of the International Federation of Information Technology for Travel and Tourism (IFITT), a world leading entity in eTourism. IFITT is an independent global community for the discussion, exchange and development of knowledge about the use and impact of new information and communication technologies (ICT) in the travel and tourism industry. Measuring the network In order to analyse the complexity of the network and the relationship between its actors, the following four indicators were initially used: 1) participation in scientific journals and conferences, 2) research and prototype development, 3) participation in research projects and 4) participation in committees and working groups of international prestige. However this paper will solely concentrate on those indicators which concern the stra-tegic agreements. Figures 4 and 5 show the network built around CICtourGUNE. It is clear that the network is much larger than shown, especially if we consider that each of the partners of CICtourGUNE also maintains partnerships with other companies through research projects and contracts. These other relationships, however fall outside

however, fall outside the scope of this study.

An analysis of Figure 5 (strategic agreements) ought to reveal that CICtourGUNE might well have a relatively favoured position in the network, which encompasses 28 actors (nodes) with a maximum of 5 ties each. The measurements of centrality are the following: Degree: CICtourGUNE shows a degree of 1.03 out of 5 (Table 3), whereas almost all other actors have a degree of less than 0.5 (Table 3). CICtourGUNE which has more direct ties has greater opportunities because it has choices. Closeness: CICtourGUNE is closer to more nodes than any other node (Table 3). In other words, CICtourGUNE is able to reach other nodes through shorter path lengths (closeness and farness indicators in Table 3). Betweenness: CICtourGUNE lies between many other pairs of nodes and no other nodes lie between CICtourGUNE and other nodes (Table 3). In addition to these centrality measurements, cluster coefficients (Table 4) and density measurements could also be calculated. The results show that there are several well defined clusters: On the right side of the network graph, with a much higher density, a cluster of the main actors of the Spanish tourism R&D scene is found: Segittur, IBIT, CINNTA, Tecnotur or ITH. On the top left hand side of the graph, with a much lower density, the cluster of Spanish universities is found, connected to the network through the University of Deusto or CICtourGUNE. Finally on the lower left hand side of the 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 higher density than the CICtourGUNE network as a whole. There is intensive cooperation within the Spanish tourism R&D cluster and we can say that CICtourGUNE seems to be well connected to this cluster, which contains the main actors of the tourism R&D system in Spain. However, there are a number of short comings in connection with the links between the 2 clusters of universities and the Spanish tourism R&D cluster. On the one hand, the cluster of Spanish universities (on the top left hand side of graph 5) shows a much lower density and it also shows a high dependency on CICtourGUNE and the University of Deusto on their way to connection with the main Spanish R&D cluster. On the other hand, the cluster of foreign universities (lower left hand side of the graph) also shows a low density and a high path dependency on CICtourGUNE and ECCA (Austria).

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Figure 4. CICtourGUNE’s Overall Networking Dynamics (strategic research projects). Source: Own elaboration. Lastly, the Spanish R and D cluster enjoys a decentralized network, with several central nodes (in the central multi-hub network), that enables a more efficient transfer scheme. In contrast, in the whole CICtourGUNE network, there is an almost unique central node, which is CICtourGUNE itself, which limits access of the 2 university clusters to the main Spanish R&D centres cluster. These results show a clear concentration of agents involved with CICtourGUNE. These agents are basically three institutions: CICtourGUNE, University of Deusto and ECCA-Austria (Figure 5). The personal relationship between the director of CICtourGUNE and the University of Deusto explains the joint work in these areas. The relationship with ECCA is based on its extensive research experience in e-Tourism. The projects

emphasize collaboration with partners, which are mainly technology centres and technology-based companies such as Innovalia (Figure 4), a joint R and D platform. Additionally, universities, technology-based companies and foreign institutions have a notable role in this network. The cooperation drivers and barriers have been summarised in Table 5. Conclusions ‘Tourism, travelling and mobility’ is a rising industry in the world economy, but its potential to innovate has not been fully developed. Most innovations currently happen outside of the industry and are only later adopted by


Figure 5. CICtourGUNE’s Overall Networking Dynamics (strategic agreements and joint workshops). Source: Own elaboration.

organizations within the tourism industry. This is partly due to the unique structure of the industry and the particular nature of its product. Tourism experiences consist of a variety of products and services, which need to be created, marketed and sold by a multitude of businesses. These businesses are typically small and do not engage in research and development-related activities, or at least not to the extent common in other industries. While collaboration is necessary and implemented in some areas, collaborative efforts in tourism are still limited, despite the great need for knowledge sharing and cooperation in order to effectively sell tourism experiences and destinations.

This work presents a preliminary approach to Public-Private Innovation Networks in Tourism (PPINT) through a case study: CICtourGUNE. Public-Private Innovation Networks in Tourism (PPINT) are an organizational

innovation for boosting innovation in tourism SMEs, to help clarify the tourism sector’s needs and standardize some solutions. Table 6 summarizes strengths, weaknesses, opportunities and threats of PPINT in the light of our research study. “Unlike market exchange, exchange in a network is characterised by giving in exchange for an uncertain return (uncertain with respect to when, how much and even who). Networks function on the basis of trust and reciprocity” (European Commission-Directorate-General for Enterprise and Industry, 2008). In any case, it seems that PPINT effectiveness to transfer innovation to tourism SME-s depends critically on the knowledge intensive business services (KIBs) involved in the PPINT. KIBs sector includes many R&D intensive firms that provide services to tourism firms, such as ICTs, software development, R&D, and non-technological inno-vations, which contribute to the upgrading of the tourism

Plaza et al. 475

Table 3. CICtourGUNE Network Centrality Indicators. Degree:

No. of ties Normalized Eigenvalues

Farness: No. of ties

Closeness: Normalized Scores

Betweenness: Normalized Scores

CICtourGUNE 1.03 0.522 27 1.00 0.454 Robotiker 0.44 0.311 43 0.62 0.009 Basquetour 0.25 0.170 48 0.56 0 University of Deusto 0.48 0.264 42 0.64 0.04 Noski Consulting Group 0.25 0.170 48 0.56 0 Vicomtech 0.44 0.311 43 0.62 0.009 ITH 0.59 0.409 39 0.69 0.027 Segittur 0.44 0.320 43 0.62 0.014 Tecnotur 0.48 0.361 42 0.64 0.005 IBIT 0.48 0.361 42 0.64 0.005 CINNTA 0.37 0.289 45 0.60 0 CDTI 0.37 0.289 45 0.60 0 EC3, Austria 0.40 0.291 44 0.61 0.009 ECCA, Austria 0.74 0.452 35 0.77 0.096 OMT 0.22 0.082 49 0.55 0 UOC 0.48 0.340 42 0.64 0.014 Alcala Univ 0.44 0.338 43 0.62 0.004 Balearic Islands Univ 0.25 0.102 48 0.56 0.001 Univ Oviedo 0.25 0.102 48 0.56 0.001 Univ Cadiz 0.25 0.102 48 0.56 0.001 Vienna University of Technology 0.07 0.045 53 0.50 0 University of Applied Sciences Worms (Germany)

0.25 0.134 48 0.56 0

Univ. of Applied Sciences Ravensburg Weingarten (Germany)

0.25 0.134 48 0.56 0

COTEC 0.29 0.128 47 0.57 0.005 x + o Business Solutions GmbH (Austria)

0.37 0.196 45 0.60 0.011

eCTRL Solutions 0.22 0.154 49 0.55 0 Afidium (France) 0.25 0.134 48 0.56 0 Standards 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


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

Type of innovation

R&D partnership in eTourism, eTravelling, Heritage and Creativity; ICT; Pushing ahead strategic research in tourism sciences; Knowledge-sharing and technology transfer. Product, process and organisational types of innovation.

Type of innovation network

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). 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).

Drivers / Barriers

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. 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).

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 networking environment (for example, a Regional Innovation System). This enables quicker access to resources and know-how that cannot be time-effectively/cost-effectively produced internally (that is, transaction costs).

� An innovation appropriation regime: difficult to appropriate the cash-flows of knowledge products and to avoid the illicit appropriation of knowledge and technology. Building up win-win relationships is required.

� The private sector takes an increasing active role as the network evolves. Technological SMEs should have a well established R and D umbrella structure which allows fast changes in the network’s life-cycle.

� Expectations should be managed from the beginning: all the stakeholders must accept a clear division of roles. This contributes to the lessening of tensions.

� Elements outside the Network can play an active role in the networking process. The networking exceeds the formal partners and geographical boundaries.

� A high degree of dependence on public resources. Regional Government plays a key role in financing Tourism Innovation consortia.

� A remarkably small number of strategically placed ties can dramatically increase the effectiveness of the network.

� It is important to give priority to developing technology transfer organizations and structures, in order to nurture systemic 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 put into the joint programmes.

� When the innovation network is top-down (institutional) rather than bottom-up, innovation can not respond to markets needs.

� Coordination-oriented ICT infrastructures within the innovation network can reduce the need for coordination (and thus transaction costs).

� Some networks lack the necessary competence to interact effectively within the network: this requires capacity building (instruction and training)

� Strategic alliances must be nurtured by networking: networking is learnt through networking.

� Network lock-in: network members become unable to use other innovation infrastructures without substantial switching costs

478 Afr. J. Bus. Manage. Table 6. Cont’d

� Strategic alliances must be nurtured by networking: networking is learnt through networking.

� Public sector entrepreneurs and private sector entrepreneurs are required � 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 among PPINT members � Can cooperation have a negative impact on the PPINT actors?

� Enabling locally-developed small-scale innovations. � Peer coaching becomes more effective than training.

� Can PPINT fail because of missing links between agents (for example, missing information transfer)? Missing links may be due to: � poor selection mechanisms � 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 to the extent that two or more actors (network nodes) share experience, knowledge and know-how.

� Can PPINT fail because of lack of openness (for example, a temptation to monopolise returns that may lead to ‘lock-in’)?

� Experience curve effects: density of interaction within the network can report innovation management efficiency gains as a consequence of more accelerated “learning curves”.

� Opportunism can hinder the PPINT s̀ effectiveness either because of: � previous adverse experiences � asymmetrical appropriation of the PPINT generated value, or misalignment of incentives � mismatched expectations � lack of shared experience � cultural barriers

� Standardization: as innovation sequences (mostly technology-driven innovations and subsequent learning processes) become more standardized, networking efficiency can increase

� Innovation-oriented experience-curves can come to a sudden end when the network is not producing the marketing mix that the market values.

� Successful innovations occur at the boundaries of the PPINT, where the needs and challenges of innovation users and the potential of the innovations can be connected together, in an inspiring process that expands beyond both the PPINT insiders and outsiders.

� A decentralized network of managers’ structure is requested for effective transfer of knowledge to network partners. Several central managers (multi-hub networks) are necessary for effective cooperation.

� Networking effectiveness relies heavily on sharing tacit knowledge. Effective transfer of tacit knowledge requires intensive personal contact.

� Network managers must strike and follow up network members decisively (especially SMEs and micro-firms).

� Knowledge Intensive Business Services (KIBS) can play a key role in transferring innovation to SMEs (Figure 6).

� Sharing the Vision: a long term strategic planning perspective should be shared by the network stakeholders

� PPINT can create a favourable environment for innovation.

Plaza et al. 479

�

Theoretical Value Chain:

TechnologyCenters CICtourgune

Value Chain in Practice:

Consultants

ICT TechnologyProviders

TechnologyCenters

CICtourgune

Figure 6. e-Tourism Technologies Value Chain. Source: Own elaboration.

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