Social network dynamics and innovation in small tourism companies FLEMMING SøRENSEN AND LARS FUGLSANG
Introduction Tourism is a dynamic sector in which company survival depends on innovation (Sundbo et al. 2007). It has been illustrated that innovation in industries and services, including tourism, are influenced by networks (Ahuja 2000; Hjalager 2010; Sørensen 2007). Social network theory, for example, argues that networks facilitate the information flows necessary for companies to innovate (Ahuja 2000) and that these flows depend on network structures, for example the strength and cohesion of the relevant network (Burt 2000; Coleman 1988; Gilsing and Duysters 2008; Granovetter 1973). The role of the spatial distribution of networks for innovation has also been discussed (Boschma and Frenken 2010; Camagni 1995; Saxenian 1991) and, particularly, it has been argued that local networks sustain knowledge development and innovation (Maskell and Malmberg 1999). The role of innovation networks in tourism has also been emphasized (e.g. Baggio and Cooper 2010; Lynch and Morrison 2007; McLeod, Vaughan and Edwards 2010) and at least one study has discussed how the geographical distribution and cohesion of social networks can influence innovation in tourism (Sørensen 2007). In this chapter another theme has been added to the discussion: network dynamics, which is related to how network structures coevolve with knowledge distribution and innovation opportunities. Though innovation is a dynamic phenomenon, such network dynamics have been a neglected theme in innovation network research (Ahuja et al. 2012) and in spite of the dynamic nature of tourism this neglect is also evident in tourism research. The understanding of the outcome of networks suffers as a result of this neglect (Ahuja et al. 2012). In this chapter we focus on the knowledge gap concerning how network dynamics co-evolve with innovation opportunities in tourism. The research question is how the dynamics of social network structures (in terms of cohesion and geographical distribution) affect knowledge distribution and innovation opportunities in tourism. Qualitative and exploratory attempts to discuss this have been made by reporting a comparative case study of three networks of small tourism companies belonging to a peripheral Danish tourist destination. Networks are considered important for such rural destinations (Romeiro and Costa
2010) characterized by small firms, as they are especially likely to benefit from networks (Hjalager 2010; Lynch and Morrison 2007; Zehrer and Raich 2010). The cases were selected from a larger number of cases, and illustrate different types of network structure, network dynamics, knowledge development and innovation opportunities.