Internationalization and innovation are significant themes in tourism research whose inter-relationship has been largely neglected. Starting from the international economics literature, which focuses mainly on the multinational enterprise, and on knowledge issues, the relationship can be conceptualised in three ways: internationalization is a form of innovation, successful internationalization requires innovation, and internationalization requires firms to have superior knowledge. Turning from this generic literature to the specificities of tourism, two aspects of the simultaneity of production and consumption critically shape internationalization: the requirement for co-presence, and consumer mobility. However, a firm-focussed approach fails to address the changing international environment of the enterprise, especially the increasing importance of global connectivity in relation to entrepreneurs, labour and tourists.
Internationalization and innovation in tourism are interwoven but, with few exceptions, the respective literatures have remained unengaged with each other. This constitutes a double lacuna. First, although internationalization is recognized as a central feature, and a driving force, that shapes and reshapes tourism (Fayed and Fletcher, 2002, Johnson and Vanetti, 2005 and Lanfant et al., 1995), the economic aspects have been weakly theorised (Bianchi, 2002, Hjalager, 2007 and Knowles et al., 2001). Yet innovation theories can provide insights into the driving forces, nature, and processes of internationalization. Secondly, internationalization is a key dimension of tourism innovation, evident in terms of markets, knowledge transfer and production conditions. This paper explores how the relationships between innovation and internationalization can be conceptualised, thereby contributing to mapping out future tourism research agendas.
Theoretical work on the economic analysis of both innovation and internationalization traditionally has focussed on manufacturing (Coviello & Munro, 1997), and selectively on some service sectors such as retailing (Alexander and Dawson, 1994 and Coe and Hess, 2005). In contrast, tourism is relatively neglected (see Shaw and Williams, 2004 and Sinclair and Stabler, 1997). This is rooted in an ideological paradigm that sees manufacturing as the dynamic motor of the economy. Yet there is strong and growing evidence of the internationalization of tourism, whether in terms of production (Go & Pine, 1995) or consumption (Vellas & Becherel, 1995). This makes the relatively limited theorisation of tourism innovation particularly surprising.
The starting point for this conceptualization is the most developed area of research in the field, the international economics literature on multi-national enterprises. This asserts the central importance of comparative knowledge advantages, especially under conditions of uncertainty. Originating with Hymer (1960), these theories argue that firms which internationalize necessarily have superior knowledge (and hence innovation capacity) than nationally-focussed companies. Caution is needed here. While the term multi-national has become synonymous with large-scale enterprises, it can refer to any enterprise operating across borders. Internationalisation is not—and probably never was—the exclusive preserve of large corporations (Zahra, 2005). There is also a need to consider internationalization and innovation in small and medium sized enterprises (SMEs) (Prashantham, 2008), which are especially important in tourism ( Mungall and Johnson, 2004 and Smeral, 1998).
The generic literatures on internationalization and innovation need to be informed by the specificities of tourism. While there are several distinctive features of tourism innovation (Hall & Williams, 2008, chapter 1), the key issue in internationalization is the simultaneity of production and consumption. This has two main consequences. First, enterprises that provide services directly (rather than through sub-contracting) to tourists in international markets require co-presence: they must have a material local presence, whether in the form of a car rental office or airline staff at an airport. Secondly, tourism is distinctive in that a significant market segment (international tourism), by definition, is mobile beyond the immediate locality. Firms developing their global reach and brand building (Vellas & Becherel, 1999) may therefore have to undertake direct foreign investments, requiring associated innovations, if they are targeting the provision of tourism services to non-nationals—whether from their own or other countries—in a foreign destination.
Although international economics provides a useful perspective, it fails to address the changing context of the internationalization of innovation, especially in tourism. The distinctiveness of tourism innovation is shaped not only by the inherent mobility of tourism consumers, but also by the more generalised internationalization of mobility, and connectivity. One of the drivers of innovation, especially in terms of accessing knowledge, is global connectivity (NESTA, 2008). In a globalizing world, there is increasing scope for tourism innovation to be shaped not only by the internationalization of capital, managers and entrepreneurs, but also of tourists and labour. Global connectivity assumes particular importance in the context of the emerging understanding of innovation as being co-produced and co-created (Etgar, 2008).
The first part of the paper reviews the classic theorisation of internationalization in economics, and considers the specificities of tourism in this setting, while the second part considers tourism innovation in the context of global connectivity. The final section sets out an agenda for future research.
References to internationalization litter the tourism literature, and it is variously referred to as a driver, a shaper, or an outcome of change. However, relatively little attention has been given to either the conceptualization of internationalization in tourism, or to theoretically-informed empirical work that addresses two key questions: why, and how, do businesses internationalize their operations? This paper has explored how an innovation perspective can contribute to the challenge of deepening theoretical understanding in this area. Arguing that, at the same time, a focus on internationalization will strengthen the emerging literature on tourism innovation. By way of conclusions, we set out six priorities as an agenda for taking this forward.
First, and expanding on the theme of internationalization being a form of innovation, there is a need to research how businesses approach this challenge. How do they understand internationalization as a form of innovation that drives their performance and competitiveness? And where does internationalization fit into the overall strategic plans of different types of firms—whether in terms of size, life-cycle, sub-sector or nationality? One of the keys to addressing this lies in the tensions between the logic of internationalization, in a globalizing economy, and the persistence of national and regional differences in consumption, and conditions of production. This echoes the call by Matusitz (2010) for a better understanding of how ‘glocalization’, or the localization of globalization, is reshaping corporate strategies. Another way to approach this is by asking whether particular types of innovation, have distinctive international reaches—either in terms of their potential, or even as a compelling driver. This was implicit in the OLI model as applied to hotels (Dunning & McQueen, 1982), but that can be fruitfully revisited through the lens of innovation research.
Second, if internationalization is understood as being dependent on successful innovation, this leads to the question of what constitutes the key innovations. No simple answer is likely to be forthcoming, not least because the focus of innovation shifts at different stages (Johanson & Vahlne, 1977) in the internationalization of tourism (Hjalager, 2007). What types of innovation are required in the initial, consolidating and mature stages? Can these be analysed through the traditional lenses of innovation typologies (Hall & Williams, 2008), whether incremental versus discontinuous, or product versus process, organizational, marketing and institutional? Or is there a need for new typologies of innovation that specifically address the double specificities of tourism and internationalization? If so, these new typologies are likely to encompass how we conceptualize innovation in relation to mobile markets, localization versus standardisation, and complex organizational innovations in ownership, leasing and franchising.
Third, given that internationalization requires firms to have superior knowledge, we need to know what types of information are critical, and the determinants of effective knowledge transfer (Shaw & Williams, 2009). The existing research focuses mostly on MNEs, but the ‘Born global’ thesis (Knight & Cavusgil, 1996) emphasises, that small firms may also either be created as internationalized, or become so in the early stages of the life cycle of the firm. This can be approached in terms of the interplay between structural/institutional determinants and individual agency. The former takes us particularly to regulation (changes in minimum requirements, export assistance etc) and market shifts, while the latter takes us towards individuals and the positioning of individuals in networks, which determine the accumulation of knowledge, often in a highly erratic manner (Benito & Welch, 1994).
Fourth, there is evidence that tourism firms are relatively more reliant on external knowledge sourced from suppliers than on the internal creation of knowledge (e.g., via R&D). Tourism firms do not simply buy in such innovations, but have to adapt them to their own needs, and this may involve varying amounts of co-production (Shaw et al., 2010). Therefore, studies of internationalization need to examine how innovation may originate in international supply or value chains, and be distributed across space rather than be disseminated across space from a single point of origin (Véronneau & Roy, 2009). Such a perspective may take us to a more nuanced understanding of internationalization than is implied in the bipolarized debate about whether standardisation or localization takes centre stage in innovation. It is an approach which takes us away from seeing the national as the key site of production and innovation, to a greater recognition of globalization tendencies producing new and internationalised geographies of innovation.
Fifth, a focus on the individual firm, whatever its scale, will only take us so far given the transformational nature of the internationalization of flows in the economy (Castells, 1996). There is a need to analyse how firms are positioned in a shifting web of inter-related flows, which shape and reshape the conditions of production in terms human capital, entrepreneurship, and knowledge. It is not only firms whose relationships are being stretched across borders, but also individual managers and entrepreneurs, employees and tourists. There is a pressing need to better understand the global connectivities of tourism and tourism firms, requiring detailed and painstaking studies to map these out and to analyse how economic relationships are increasingly internationally constructed. Of course, the extent of such internationalization should not be exaggerated—and much if not most tourism activity remains resolutely national rather than international. But there is a need to think differently and more holistically about internationalization of both the firm and its external operating environment. This resonates with the notion of relational economic geographies (Yeung, 2005). Innovation shapes and is shaped by these interwoven relationships. This is especially evident in respect of knowledge flows articulated through the international mobilities of entrepreneurs and workers. What types of knowledge move with individuals, how are the generic and tourism components of this inter-related, and what facilitates and obstructs such flows.
Sixth, while—depending on definitions—the internationalization of tourism can be traced back not just centuries, but even millennia, this has intensified in recent decades, being evident in both the intensification and extensification of connectivities (Shaw & Williams, 2004, chapter two). To some extent tourists are moving along ‘scapes’ created by the investments of state and private capital, in combination with the routinized practices of tourists. In other words, the resulting geographies of internationalization are strongly path dependent (Bathelt & Glückler, 2003). But tourists are also increasingly seen as active participants in the co-production of innovation, including tourism. Not least, individual tourists often act as pioneers signalling opportunities for tourism businesses. They are sources of knowledge, and there is a need to understand both how this differs from ‘domestic’ tourists and how businesses can harvest and apply this knowledge to innovation. At the same time, the simple bipolar construct of domestic versus international tourist needs to be deconstructed, because for many tourists these are increasingly interwoven and mutually informing learning experiences.
Internationalization may no longer be the great adventure it once was for tourists, firms or their workers, but developing an understanding of the constitutive economic relations in this field remains a largely unfulfilled adventure for tourism researchers.
