ABSTRACT
Sectors and firms are integral to the notion of innovation systems. This chapter focuses on tourism sector innovation as well as the role of firms within it. The question of whether industrial specialisation or diversification promotes more consistent, higher rates of, or more innovative, economic growth is a major debate in the regional development and innovation literature. Some of the key elements of a sectoral system of innovation and production (SSIP) are products, boundaries and demand, knowledge and learning processes, agents, networks and mechanisms of interaction, institutions, and processes of variety generation and selection. The chapter is divided into three main sections. The first discusses the tourism sector innovation system. The second examines tourism firm innovation and presents a model of the tourism firm that highlights key innovation aspects: business model (referring to the overall approach), networks and alliances, enabling process, service design and development, service value, distribution, brand, servicescape, customer service experience, customer satisfaction and customer loyalty. Finally, the chapter discusses issues of firm survivability and innovation.
