ndeed there is something which reveals innovation has magic. They are the important growth motor within the economics of markets (Sipe et al., 2009). The capability of innovation is essential not only for individual companies to survive, but also for the whole modern nation economy. Innovation nonetheless can perform the function to provide growth in economy in the favourable state presence with regard to the systems of state incentive. However, it is not the state which leads towards creating innovativeness. Instead, they are the consequence of processes that have consistently been subjected with analysis extensively, which are properly known today and have become routine quietly apparent (Sundbo et al., 2015). This is also true for innovation within the tourism field as in any sector apart from tourism.
There is no doubt that the industry of tourism has various specific features that can impact the process of innovation. This is done in manners that are positive and that also can be negative. Tourism is defined best on the side of demand. It consists of ephemeral industrial structures and heterogeneous ones. Tourism is essential to various economic sectors with an inherent dimension geographically present in it. It is also an industry wherein an essential role is played by the state as co-producer. Innovation can be such that it thrives within tourism but on in situations with maximum competition possible that makes the existing structures renewal a probability (Sipe et al., 2009). Such structures require either being developed further or being replaced completely. Newer structures are requirement of a type that will enhance growth and productivity. Governments should not make attempt at devising laws and regulations counter-productive for hindering the restructuring based inevitable process. Therefore, this research paper has been developed with focus over tourism policy and innovation in tourism.
Oligopolistic competition as an innovation driver
The framework for favourable state and its conditions are not the only ways by which innovation can be promoted. Structures in innovation which are the consequence of process of economic development result in a major impact (Rubalcaba, 2010). However, neither monopolistic competition nor perfect competition is friendly of innovation. It does not exist any reason for monopolists to initiate innovation. Innovation is successfully driven through competition of oligopolistic nature that leads towards industrialization, concentration and standardization. Tourism is such a sector, has dual structures wherein competition is neither monopolist in nature nor does it have oligopolistic nature (Sipe et al, 2009). The destination uniqueness within tourism as an economic section specific on location in turn leads towards competition of monopolistic nature. Tourism has the ability of taking benefit from such uniqueness in brand renting form and a higher will correspondingly for paying over the visitor’s part. This leads towards quality based strategies as well as differentiations to come forward. Following figure depicts competition of oligopolistic nature as an innovation driver.