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The Role of SMEs in Tourism Development

An Industrial District Approach Applied to Killarney, Ireland           

A primary concern for many policy makers and academics alike has been the development of tourism areas. Butler’s (1980) article is concerned with this very issue and he constructs a model that charts the development of a typical tourism area. There are many lessons to be learnt from this view of a path of development, but what is most interesting are the dynamics of this development. What is it that makes a tourism area move through the six stages? What is it that makes some resorts rejuvenate and others decline? Butler outlines these triggers as, ‘innovations in areas such as transportation, and in marketing as well as initiatives at the local and subsequently regional, national and international levels by developers’ (Butler, 2000, p. 290). This article briefly reviews some of the attempts that have been made at modelling tourism development and explaining its development, and concludes that an important stakeholder has been omitted from these models. It then goes on to use the industrial district approach to incorporate the vital role of small firms in the development of tourism areas.             
Butler is not the only one to have developed tourism development models. Many other less well-known theories have been developed and each has concentrated on the importance of a particular factor for the successful development of tourism areas. For example, Gormsen (1981) highlights the importance of local participation and local control, Miossec (1976) emphasises the importance of transport hierarchies, speciality and co-operation and Lundgren (1982) concentrates on the physical attributes of the area. More recent work by Ritchie and Crouch (2003) takes a much broader perspective and develops a model of tourism destination competitiveness. They concentrate on five broad areas including supporting factors and resources, core resources and attractors, destination management, destination policy, planning and development, and qualifying and amplifying determinants.
This brief overview of the literature that develops the models of tourism development shows a glaring omission. What the existing models have in common is the focus on the tourist and resources and, to a lesser extent, the importance of local community involvement. A vital stakeholder in the tourism area and product has been ignored, and that is the firms. That said, it must be noted that in Ritchie and Crouch’s (2003) grounded approach they have relied extensively on the views of industry in developing their model, yet the firms do not appear as an important element in the model. Lewis’s (1998) work does accredit individual business owners and entrepreneurs for a great deal of the tourism development in the community and also notes the important role of community leaders, but while this is identified as an issue, in-depth analysis of this contribution is not undertaken.            
It is in this vein of research that this article is concerned. Industrial district theory, developed in the economic geography literature, explains the economic success of an area by factors such as the geographical and sectoral concentration of predominantly small firms, strong inter-firm relations and the existence of a social or professional milieu and high levels of innovation. The focus is on the firms, but importantly rather than the individual firm it is the community of firms and the relationships between them that is of primary concern. This article investigates whether this type of approach is useful in explaining successful tourism development. Section one will outline industrial district theory, section two will discuss the relevance of industrial district theory to tourism and section three will present a case study of a successful tourism area in Ireland to evaluate whether its success can be explained using industrial district theory. Comment will then be made on the usefulness of introducing this approach to the tourism development literature.        



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