INTRODUCTION:

Tourism largely comprises of sellers of various heterogeneous products and services. The increasingly widespread and complex nature of activities makes its evaluation difficult. Tourism thus requires sophisticated management to realize its full potential as a positive and sustainable environmental, social, economic and cultural force. Nevertheless due to its magnificent socio-economic potential, tourism occupies the same global order of magnitude as agriculture or mining. As per reports of World Tourism and Travel Council (2012), the major organization with 215 million jobs representing the global tourism industry was dependent on the 'tourism economy'.

In order to maximize and develop its potential, economic and social benefits in a consistent manner with society's goals, the study and analysis of tourism becomes imperative. Moreover, the tourism industry is regarded as one of the key industries for driving economic development and economic transformation in developing countries (Syed et al., 2014; Ahmad and Hussain, 2017; Jabir et al., 2013).

However, the adoption and implementation of various business strategies faces unique challenges in tourism business (Cherrapunjee, 2017; Vikas, 2017). For example, marketing challenges in tourism business are unique as these businesses cannot be promoted in isolation from their competing and complementary products (Shrivastava and Shridhar, 2018; Vikas and Amit, 2014a). Likewise, despite of its potential in driving community empowerment in developing countries, the first stage of local community empowerment starts with understanding tourists and tourism processes and to make informed and appropriate decisions about their tourism development (Paul and Kuriakose, 2017). It requires considerable investments for communication and trust building among different actors involved in tourism. In this context the successful development of tourism needs to understand the importance of entrepreneurship and human resource management (Satar et al., 2016; Satar, 2018). Arguably, the development of small tourism enterprises needs to be viewed primarily through the importance they have in interacting agricultural production, the production of traditional products, the presentation of traditions and traditional gastronomy, and tourism services (Mishra and Jha, 2013).

There are various factors responsible for contribution of tourism to national or local economy or, more generally, to development. The less developed countries would show greater dependence on tourism as compared to industrialized countries. Most of the countries having resources available in limited quantities depend more upon tourism activities for their economic development. Conversely, in some developed states tourism is the dominant economic sector. Cyprus although being non-industrialized is counted among high income countries with a per capita GDP of around $14,000 and enjoys human development indicators matching those in developed countries. The main reason being that tourism is the most significant economic sector, contributing 20% of GDP, 25% of employment and about 40% of exports (Sharpley, 1998).

Thus tourism being the major source of income, jobs and wealth creation is acknowledged as one of the key sectors of development in all countries. Besides enhancing the international perception of a country externally, tourism is found influencing the complementary domestic policies as well.

Moreover, the pace of change in technology coupled with increased frequency of major business transformations like entry of new firms, mergers, and deregulations etc. have shaken most of the industries across the globe. The consequent volatile business environments have led the organisations to consciously and continuously strive for competitive advantages. This has led to the discovery of new and improved strategic means of securing competitive advantages like for example the strategies of entering new markets, developing new business models or making strategic innovations etc.

The changing business trends and patterns in tourism sector have considerably impacted the strategic positioning of tourism market as well. As a consequence, the Governments and other stakeholders of tourism sector are rightly engaged to leverage various innovative means of driving competitive advantage.

Entrepreneurship and tourism development

Entrepreneurship is largely being consented as a process of growth by means of creativeness, innovativeness, identification and exploitation of opportunities (Nasution et al., 2011). The endeavor of entrepreneurship involves not only creation of enterprise but also the recognition of an opportunity (Kirzner 1999), risk taking (Stevenson and Jarillo, 1990) and other processes including innovation (Satar and John, 2016; in press). Indeed, one of the essential elements of entrepreneurship includes innovation (Schumpeter, 1934) and one of the associations for entrepreneurs is being innovative which leads to creation of employment.

The role of entrepreneurs has been described by a large volume of published studies (Sata; 2018; Satar, 2016). The evidences supporting the role of entrepreneurship and innovation in economic wealth creation, employment generation, social and economic renewal are increasing across nations. Accordingly, entrepreneurship policy has emerged as the focus of public policies in majority of the countries in the recent past. Richard Cantillon (1959) defines the entrepreneur as a profit making individual; with risk facing ability. Schumpeter (1934) provided new insights about the entrepreneur and the entrepreneurial process by linking it with economic theory. Entrepreneurship quality, entrepreneurial leadership, market and marketing orientation, have showed a positive influence on the business performance of an enterprise.

Entrepreneurship is necessary for construction of new businesses and creation of new organization. So, it plays crucial role for growth and development of economy and lead to business benefits. Entrepreneurial individuals channel and transform their entrepreneurial desires and potentials into actions. So, an organizational extension of individual entrepreneurial actions and a behavioral manifestation of entrepreneurship could be identified in small firms (Wennekers and Thurik 1999). In this way, entrepreneurship quality leads to creation of jobs in small tourism business and growth of economy generally. New small tourism businesses contribute to the flourishing of entrepreneurship as being important catalysts or actors in technological innovations; as agents of change in market structure and competition environment and as critical forces in industrial restructuring and national competitive advantage upgrading (Hart, 2003).

Both tourism and entrepreneurship has been patented as inexpressible and hard to measure as the relationship between the effect of entrepreneurship on tourism and the attention it has received in the tourism literature seems to be conversely related till date (Shaw and Williams, 1998).

Generally, the entrepreneurship/profit nexus in relation to tourism in developing countries has been empirically supported by Shaw and William (1998). According to Faulkner, (2000) tourism entrepreneur might act as a change catalyst by three ways like he can reduce competition by smarter management of extremely generated emergencies, by using his superior tactics inducing crises for his competitors that render them less viable and by excessive expansion beyond the carrying capacity and environmental sustainability limits. Mckercher, (1999) has briefly showed that the transformation of a region and vision of an entrepreneur is directly linked to each other. Tourism industry would not evolve without the influence of entrepreneurs even in the most favorably resource endowed areas (Koh and Hatten, 2002). Russell and Faulkner (2004) and Mc Kercher (1999), similarly clarify that entrepreneurs play an integral role in developing tourist destinations while recognizing them as ‘rogues or chaos makers’. Shapero, (1981) and Pearce, (1995) believe that entrepreneurship provides diversity and dynamism to the community that leads to continuous development whose influence may extend beyond individual development projects stimulating the others to undertake development. Mottiar and Tucker (2007), acknowledge a growing number of significant studies showing the significant impact of small tourism firms and on the development and operation of a destination. Keen and Hall, (2004) in their study of tourism in New Zealand, claims that the main facilitators of development of a region are social or community entrepreneurs. Hall, (2005) suggests that small businesses and entrepreneurs are the foundation of the tourism product, delivering the tourism reality, quite often in the form of niche accessible and attractive in regional and rural areas of many countries (Hall, 2007). This influencing behavior of entrepreneurs on the development beyond their own individual contribution gives the clear understanding about the extent to which they can influence on tourism development.

Innovation in tourism and its impact on performance

Innovation has been regarded as an essential factor for economic competitiveness of firms in the current market situations (Madhusudan and Panneerselvam, 2017). It has emerged as a driver of economic growth and prosperity in several countries (Fagerberg and Godinho 2004). Additionally, innovation has shown a greater impact on improving the output performance of services industries that has led them to gain is a source of competitive advantage (Van et al., 2003). Researchers (Kamien and Schwartz, 1982; Hjalager, 2002; Becker and Whisler, 1967) have described innovation in various ways. Schumpeter (1934) defines innovation as new products/services, new production techniques or new organizational structures. Alternatively, Becker and Whisler, (1967) define innovation as the early use of a creative idea by one of the organizations that have similar goals. Kamien and Schwartz (1982) believes that innovation is the outcome of the organizations’ activities meant for creating new products/services or production processes. Although many authors have categorized innovations differently in the innovation literature (Weiermar, 2006), there are five types of innovation have been most commonly used by researchers. These include process innovation (the implementation of an incrementally changed or radically new production process or delivery method), service/product innovation (an incrementally changed or radically new good or service that can be commercialized), organizational innovation (the implementation of a new or incrementally changed organizational method or managerial form), marketing innovation (the implementation of a new or incrementally changed marketing strategy that develops the sales market) and business model innovation. Ecevit and Işık (2011) argue that most important factors responsible for the success of innovation management in a competitive environment are strategy and leadership. The innovation capabilities of a company have got a greater and positive influence on the company performance.

The study of innovation in tourism is also in its infancy. The firms are obliged to innovate because of the presence of highly competitive market characteristics in order to keep up with competition (Hall and Williams, 2008). However, it is not so difficult to copy the competitors in tourism sector making the firms more challenging to protect their innovation. This is the main reason that forces the firms to innovate constantly so as to keep up their competitive advantage (Porter, 1998). Poon (1990) while analyzing technological innovation and its effects to the tourism industry gave rise to one of the most important questions “how these technological innovations can help grow the small flexible tourism businesses”. Most of the researchers believe that unlike small firms of other sectors, small tourist companies are less likely renewed (Mattson, et al., 2005). One of the authors in his study concluded that in tourism industry innovation exists in various forms. Therefore, the classification method needs to be applied while dealing with these different forms of innovation (Gyurácz et al., 2010). The innovation of tourism products is receiving greater emphasis, as all tourism related products are being renewed. The reason being increase in the satisfaction needs of consumers. These products are medical tourism, ecotourism and cultural tourism (Gyurácz et al., 2010; Udupa and Kotreshwar, 2010). OtterbacherandGnoth (2005) in their study concluded that use of innovation have got several advantages. One of the major benefits of successful innovation is to be or become, more competitive in the context of business and hospitality (Otterbacher, 2008). The next advantage to be considered is competitiveness. Innovation helps to keep the portfolio of the service and product competitive and thereby achieve long-term competitive advantages. The other benefits of successful innovations involve increased loyalty of existing customers and enrichment of a business’s reputation (Otterbacher, 2008). Investment in quality and product diversification by tourism firms makes them frequently more competitive. In addition to this modifications in quality can contribute towards a more appropriate price strategy. Consequently, reduction in costs of production, marketing enhancement and increased product value makes the innovation more crucial (Weiermair, 2006).

The most important factors driving the tourism sector towards innovation include:

· First, globalization has resulted in the deregulation and increased competition in the tourism sector (Weiermair, 2006). Nowadays, increase in the number of tourists and having easy access to more regions/markets drives the firms and tourism destination to adapt to the new reality and develop strategies so as to improve or maintain their competitive advantage. This will result to the growth and extension of tourism consumption to new economies.

· Second, there is a complete change in tourist profiles. Tourists have now become more experienced and informed. ICT has facilitated access to information and increases the demand for alternative and more sophisticated products making the tourists more independent and able to self-organize their own holidays.

· Third, In order to gain competitive advantage in this volatile business environment sustainability is essential. Therefore it is required by the tourism firms to manage themselves in line with the three key dimensions: economic, social and environmental.

CONCLUSION:

Tourism development is now days considered as one of the most important factor for economic development. The tourism industry is regarded as one of the key industries for economic transformation in developing countries. It has got a greater impact on job creation leading to empowerment and development of the local communities in particular and economic development in general. Most of the countries not bestowed with enough resources depend on this sector for their growth and development. In order to boost this tourism industry the role of entrepreneurs cannot be underestimated. Entrepreneurs act as catalysts or actors in technological innovations, as agents of change in market structure and competitive environment and as critical forces in industrial restructuring resulting in upgrading the national competitive advantage. It is usually the innovative capability of the entrepreneurs that encourages and enables the firms to adapt to the changing business markets so as to gain a competitive edge. The consumers have now days become more experienced and highly knowledgeable which leads to greater demands of satisfaction. There is no company which can survive in this changing environment without being able to innovate from time to time. Therefore the innovation has got a greater impact on the business performances thus playing an important role in today’s economies.

Nevertheless, while tourism business is poised to greatly benefit from the adoption of entrepreneurial strategies, the literature suggests that there are a number of barriers to its successful adoption. Consequently many practitioners and managers remain unaware about the potential of entrepreneurship in organizing or augmenting the tourism process. In this regard creating understanding about the overall strategic view of entrepreneurship in tourism sector could go in long way in removing the barriers to its systematic adoption.

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Received on 28.05.2018 Modified on 30.06.2018

Res. J. Humanities and Social Sciences. 2018; 9(3): 652-656.

DOI: 10.5958/2321-5828.2018.00109.2

Entrepreneurship and Tourism: The Nexus for Tourism Industry Development