The evaluation of integrated innovations in rural tourism organizations

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Lithuanian University of Sports

Department of sports and tourism management

The evaluation of integrated innovations in rural tourism organizations

Mejeryte-Narkeviciene K., lecturer

Paulauskas P., student

Abstract

With such heightened awareness of innovation within a tourism industry, the factors to improve economic growth and trajectory of an organization is said to be critically dependent upon whether an organization chooses to implement innovation into their business strategy. Innovation is recognized as one of the most determining factors in the improvement of competitiveness, becoming a powerful explanatory factor of the differences between countries, regions and companies in terms of their economic growth. Thus, implying that in order to be competitive amongst competitors across nations, regions and towns, innovation is key. It also instinctively raises the question of if innovation is the key then what does it unlock? For example, if innovation is important, does it unlock the knowledge to understand challenges faced by rural organizations when integrating innovation and how to solve them? Or does it provide an organization with a specific way to measure its ability to integrate innovation into its business structure? In order to assess these questions, the purpose of the research is to evaluate integrated innovations within rural tourism organizations. The research object is the integrated innovation. The objectives of the work are to define the types, classifications and determinants of innovation; analyze rural tourism organizations in Lithuania and their ability to implement innovation by examining its readiness and challenges; determine integrated innovations in rural tourism organizations through methods of measuring innovation. The research is based on the analysis on the types of innovation - product innovation, organizational innovation and service innovation - on the works of Volo (2006), Fagerberg and Godinho (2006), Hjalager (2002). As well Burgelman et al. (2004), Furr & Dyer's (2014), Ries (2011), Najda-Janoszka & Kopera (2014) and Koen et al., (2001) who examine the main methods used to measure integrated innovation within rural tourism of classifications, determining factors and developmental theories about innovation and its relationship with the tourism sector. Research methods are scientific literature analysis, questionnaire survey, descriptive statistical data analysis. Results of the research. When determining an organization's readiness/capability to implement innovations, important characteristics and distinctions are used to conclude if an organization is considered to be a part of the “innovative ready group” or “non-innovative ready group”. An evaluation such as this, also highlights a company's strengths and weaknesses, which enables the organization to understand what challenges need to be overcome and what can be left as is. More importantly, by using methods such as the Innovator's Methods and IC-Index structures, businesses can make informed decisions about integrated innovations within their business.

Keywords: Innovation, Rural Tourism, Integrated Rural Tourism, Measuring Integrated Innovation.

Анотація

Rural tourism is one of Europe's most important industries, and it plays a significant part in the economy of the nations where it is practiced. As a result, competition in this market has substantially increased. The ability to achieve a strategic competitive advantage in this highly competitive industry can be seen as a guarantee of long-term survival and profitability. Tourism, on the other hand, can adversely affect and destroy the culture, social structure, and environment of the destination (Sharpley, 2002). These adverse effects have a significant impact on the tourism appetite of a particular area, thereby losing an important economic source. On the other hand, in the not too distant past, innovation has always meant spending large amounts of money on R&D, laboratories and technology (Mitchell and Bruckner, 2004). Today, the nature of innovation is also changing, making business model innovation more attractive to decision makers. This is because changing the business model without paying for the new technology can bring significant benefits (Chesbrough, 2007). Rethinking innovation and business models have traditionally been seen as a strategic competitive advantage (Mitchell and Bruckner, 2004; Giesen et al., 2007), but it is also effective in preventing adverse effects.

With such heightened awareness of innovation within a tourism industry, the factors to improve economic growth and trajectory of an organization is said to be critically dependent upon whether an organization chooses to implement innovation into their business strategy. Innovation is recognized as one of the most determining factors in the improvement of competitiveness, becoming a powerful explanatory factor of the differences between countries, regions and companies in terms of their economic growth (Mel, McKenzie and Woodruff, 2009; Najda-Janoszka and Kopera, 2014; Shum, 2015; Abreu Novais, Ruhanen and Arcodia, 2018).

Thus, implying that in order to be competitive amongst competitors across nations, regions and towns, innovation is key. It also instinctively raises the question of if innovation is the key then what does it unlock? For example, if innovation is important, does it unlock the knowledge to understand challenges faced by rural organizations when integrating innovation and how to solve them? Or does it provide an organization with a specific way to measure its ability to integrate innovation into its business structure? In order to assess these questions, the aim of this research was to evaluate integrated innovations within in rural tourism organizations. The objectives of the work are to define the types, classifications and determinants of innovation; analyze rural tourism organizations in Lithuania and their ability to implement innovation by examining its readiness and challenges; determine integrated innovations in rural tourism organizations through methods of measuring innovation. The research is based on the analysis on the types of innovation - product innovation, organizational innovation and service innovation - on the works of Volo (2006), Fagerberg and Godinho (2006), Hjalager (2002). As well Burgelman et al. (2004), Furr and Dyer's (2014), Ries (2011), Najda-Janoszka and Kopera (2014), Tao et al. (2009) Lee et al. (2011), Shum (2015) and Koen et al. (2001) who examine the main methods used to measure integrated innovation within rural tourism of classifications, determining factors and developmental theories about innovation and its relationship with the tourism sector.

Methods of Measuring Integrated Innovation

The novelty and acceptance for new ideas, as well as their exploration and growth, are important indicators of innovativeness. Nonetheless, new ideas do not emerge in “the full splendor of their capabilities” (De Bono, 1985). According to research, just one out of every 3000 raw ideas reach the final stage of profitable commercialization (Kuczmarski, 1996; Stevens and Burley, 1997). It requires time and money to develop and add value to these ideas so that they may be sold. However, even allocating greater resources to encourage future development may not ensure the intended outcomes. The level of success of the invention and commercialization process is determined by a number of factors. Previous research has classified innovation capabilities/practices into three categories: strategy, systems, and culture (Burgelman et al., 2004). Furr and Dyer's (2014) Innovator's Method is one attempt at developing a more generic, easy to understand approach to innovation processes. The Innovator's technique is a holistic paradigm that incorporates numerous existing product development procedures into one. The Innovator's process begins with gaining insight into the customer's demands, then extensively explores the company's challenges in order to develop multiple solutions through fast prototyping, and ultimately aligning the solution with a business model and scaling up the solution (Ries, 2011). Koen's et al., (2001) proposed framework follows the make-up that insights can be generated by: challenging current solutions, monitoring consumers while existing goods are utilized, networking with users, and through trial and error, coming up with innovative ideas. The goal of these exercises is to encourage associational thinking, which is defined as “the ability to connect seemingly unrelated facts or ideas and combine them creatively” (Furr and Dyer, 2014). The innovator's technique, in conjunction with the framework proposed by Koen et al., (2001), can be used to explain and organize the presentation of innovation approaches, which according to research, organizations that spend more time on these four discovery behaviors to uncover consumer insights are more innovatively successful than companies that spend less time on these behaviors (Ries, 2011).

The Innovation Readiness Level (ILR) is built on a six “C” model that reflects a thorough lifecycle phase of innovation, namely Concept, Component, Completion, Chasm, Competition, and Changeover/ Closedown. Each phase is based on five factors: technology, market, organization, partnership, and risk (Tao et al., 2009). Lee et al. (2011) explored the further development of the idea of IRL, which accommodates innovation theories such as product life cycle, system readiness levels, the market adoption model, and technological readiness level. Technology Readiness Levels (TRLs) are a systematic metric/ measurement system that allows for the assessment of a specific technology's maturity as well as the consistent comparison of maturity across other types of technology (Straub, 2015). The TRL technique has been utilized in NASA space technology planning on and off for many years, and it was recently incorporated into the NASA Management Instruction addressing integrated technology planning at NASA. The generic model's most useful features are as follows:

1) 'Basic' research in new technologies and concepts (targeting identified goals but not necessarily specific systems);

2) Focused technology development addressing specific technologies for one or more potential identified applications;

3) Technology development and demonstration for each specific application prior to the start of full system development of that application;

4) System development (through first unit fabrication), and

5) System operations (Straub, 2015).

However, the research conducted by Shum (2015) employs the data mining approach, essentially a neutral network, to divide the data set into two categories. One class comprises firm innovation profiles that fall under the 'innovation-ready' category. Their ratings in innovation capabilities and surroundings are consistently higher in all areas than the other 'non-innovation-ready' group. It assists practitioners in identifying critical areas for boosting innovation skills and the environment. This evaluation method highlights critical areas for improvement and supports businesses in optimizing resources to achieve satisfying innovation results (Shum, 2015).

In Shum's (2015) resultsthet-Studenttestinvestigates the statistical consistency of the difference in means between two groups (Hair et al., 2007). The findings of the study, using t-Student tests with a statistical significance threshold of 5%, demonstrate that fifteen important characteristics are statistically significant to separate the 'innovation-ready' and 'non-innovation- ready' groups. Champion, customer focus, customer interface, diversity, employee involvement, employee training, entrepreneurship, exposure to environment, external knowledge, front-end management, idea management, incubation, management training, market strategy, openness, organizational training, performance, process capability, product development, project management, R&D, scanning, teamwork, and vision are examples of such factors. These identified factors have been reported as important characteristics of highly innovative companies in published research studies that focused on smaller sets of these factors (Belliveau et al., 2002; Conceicao et al., 2002; Cooper et al., 2004).

The Intellectual Capital-Index (IC-Index) and Skandia Navigator are employed in this work (Roos, 1998). The IC-Index structure is built of a thinking component, human capital (Human and Intellectual Agility), and a non-thinking component, structural capital (Relationships, Organization, and Renewal and Development). The Skandia Navigator is divided into four sections: Human, Customer, Innovation, and Process Capital. This study's Innovation Readiness Intellectual Capital (IRIC) model contains four parts: Leadership and Vision, Renewal and Innovation, Internal Capability and Process, and Customer Orientation (Edvinsson and Malone, 1997). The goal of this measuring approach is to solve research difficulties that have been missed by prior research studies and to provide a practical answer to help companies on their innovation path. Companies may allocate resources to the five dimensions (Roos, 1998) (Organizational, Relationships, Human, Intellectual Agility, and Renewal and Development) by utilizing the framework established by the IC-Index and Skandia Navigator to optimize their return on investment in their deployed innovations.

This also assists businesses in identifying and operationalizing areas for development in order to choose the suitable tools and strategies to increase their innovation capabilities. When finding opportunities for improvement within a company's business model, resistance, hurdles, and problems exist, just as they do with any technique of measurement. The findings of the Shum (2015) experiment, for example, examined several obstacles and hurdles that emerged when three case study firms were examined. In this study, those in senior management positions did not adopt most innovation tools and techniques as part of their daily routine due to a lack of training availability, because most found it difficult to understand the innovation process (due to a lack of time to attend training), and thus could not justify committing sufficient resources to expand training to all employees. Furthermore, the survey discovered that staff were resistant to the additional effort needed by the innovation initiative. These results are consistent with past study findings that resource limitations, a lack of competencies and skills, a lack of willingness to engage in training, conflicting priorities, and a lack of assessment mechanisms all contributed to the lapse or failure of such implementation (Findlay et al., 2000). Another important finding of problems and hurdles was the lengthy time lag between the start of an intervention and its impact being observed, either monetarily or through quicker product turn-around. The primary reason for this is that successful innovation requires the participation of all workers, roles, and company-wide activities and procedures (McAdam, 2000).

Research methods

A quantitative study was selected to reveal the object of the study. The data-set examined in this research is of a survey including 309 Lithuanian rural tourism organizations. Of the sample examined, a simple random sampling from a national database from the Lithuanian Countryside Tourism Association, which associates 60% of countryside tourism service providers in Lithuania, produced a selection of 125 valid respondents. The tourism population of the tourism organization was determined by focusing on homestead tourism businesses within the total territory of Lithuania.

A questionnaire survey was conducted to find out the innovation readiness of each rural tourism organization. Each respondent (rural tourism owner) was introduced to the instructions for completing the questionnaire. The questionnaire was of 6 questions related to the evaluation of integration of innovation within rural tourism organizations and how each organization incorporates innovation within their business. The questionnaire was only targeted to rural tourism organizations and their owners.

The survey was conducted in March-April 2022 and statistical analysis of the data was performed with IBM SPSS v. 28.0 software package.

innovation product service rural tourism lithuania

Research results

A Pearson chi-square test was performed in order to find out if there was a difference between type of innovation that was chosen and its relationship between integrated rural tourism and innovation readiness.

The data in Table 1 shows that of the respondents who have service innovations within their business, 80.7% of them also participate and 51.4% of them do not participate in programs to promote integrated rural tourism. Of the respondents that have product innovations within their business, 37.5% of them participate and 8.1% do not participate in programs that promote integrated rural tourism. Of the respondents that have sustainable innovations within their business 5.7% of them participate and 2.7% of them do not participate in programs to promote integrated rural tourism. Of the respondents that have organizational innovations, 37.5% of them participate and 10.8% do not participate in programs that promote integrated rural tourism. Of the respondents that have social innovation within their business, 25% of them participate and 8.1% do not participate in programs that promote integrated rural tourism. Of the respondents that do not have any innovations set up within their business, 3.4% of them participate and 40.5% do not participate in programs that promote integrated rural tourism.

After analyzing the data, it was found that x²=65.28 and the p value is p<.001. What the data shows is that there is a significant difference between what type of innovation was chosen and whether or not their organization participates in programs that aid in integration of rural tourism (see Table 1).

Table 1

Types of Innovation and organization participation in local/governmental programs

*x² = 65.280, p<.001; The Chi square statistic is significant at the .05 level.

When taking a look at the data shown in Table 2 we can see that of the respondents who have service innovations within their business, 80.0% consider them-selves to be a part of the innovation ready group and 55% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that have product innovations within their business, 40% consider them-selves to be a part of the innovation ready group and 5% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that have sustainable innovations within their business 5.9% consider them-selves to be a part of the innovation ready group and 2.5% of them consider themselves to be a part of the noninnovation ready group. Of the respondents that have organizational innovations, 41.2% consider themselves to be a part of the innovation ready group and 5% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that have social innovation within their business, 25.9% consider them-selves to be a part of the innovation ready group and 7.5% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that do not have any innovations set up within their business, 2.4% of consider themselves to be a part of the innovation ready group and 40% of them consider themselves to be a part of the non-innovation ready group.

Table 2

Types of Innovation and Innovation Readiness

*х2 = 79.465, p<.001; The Chi-square statistic is significant at the .05 level

After analyzing the data, it was found that x²=79.465 and the p value is p<.001. What the data shows is that there is a significant difference between what type of innovation was chosen and whether or not they consider their business to be a part of the innovation ready group or non-innovation ready group.

The data in Table 3 shows that of the respondents who have human capital factors within their business, 6.9% of them participate and 8.1% of them do not participate in programs to promote integrated rural tourism.

Table 3

Determining factors and participation in local/governmental programs

*х2 = 92.504, p<.000; The Chi-square statistic is significant at the .05 level

Of the respondents that have collaboration input factors within their business, 36.8% of them participate and 5.4% do not participate in programs that promote integrated rural tourism. Of the respondents that have information and communication technology factors within their business 89.7% of them participate and 37.8% of them do not participate in programs to promote integrated rural tourism. Of the respondents that have financial development factors within their business, 31% of them participate and 8.1% do not participate in programs that promote integrated rural tourism. Of the respondents that do not use any determining factors stated above within their business, 9.2% of them participate and 59.5% do not participate in programs that promote integrated rural tourism.

After analyzing the data, it was found that x²=92.504 and the p value is p<.000. What the data shows is that there is a significant difference between what determining factor an organization has within their business and whether or not their organization participates in programs that aid in integration of rural tourism.

The Table 4 shows that of the respondents who have human capital factors within their business, 10.7% consider them-selves to be a part of the innovation ready group and 0 of them consider themselves to be a part of the non-innovation ready group. Of the respondents that have collaboration input factors within their business, 38.1% of consider them-selves to be a part of the innovation ready group and 5% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that have information and communication technology factors within their business 91.7% consider them-selves to be a part of the innovation ready group and 37.5% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that have financial development factors within their business, 33.3% consider them-selves to be a part of the innovation ready group and 5% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that do not have any determining factors within their business, 3.6% of consider them-selves to be a part of the innovation ready group and 67.5% of them consider themselves to be a part of the noninnovation ready group.

Table 4

Determining factors and Innovation Readiness

*x2 = 132.299, p <.000; The Chi-square statistic is significant at the .05 level

After analyzing the data, it was found that х²=132.299 and the p value is p<.000. What the data shows is that there is a significant difference between what determining factor that an organization has within their business and whether or not they consider their business to be a part of the innovation ready group or non-innovation ready group.

In order to analyze the significance of the types of innovation and its relationship in regards to integrated rural tourism and innovation readiness. A Pearson chi-square test was performed in order to find out if there was a difference between what type of challenges an organization had/has and its relationship between integrated rural tourism and innovation readiness.

When taking a look at the data shown in Table 5 it seems that of the respondents who have the lack of knowledge as their choice for challenges within their business, 56.8% of them participate and 48.6% of them do not participate in programs to promote integrated rural tourism.

Of the respondents that have the lack of willingness as their choice for challenges within their business, 10.2% of them participate and 48.6% do not participate in programs that promote integrated rural tourism. Of the respondents that have the lack of resources as their choice for challenges within their business, 72.7% of them participate and 75.7% of them do not participate in programs to promote integrated rural tourism. Of the respondents that have the lack of employees as their choice for challenges within their business, 56.8% of them participate and 51.4% do not participate in programs that promote integrated rural tourism.

Of the respondents that have the lack of operational procedures as their choice for challenges within their business, 40.9% of them participate and 21.6% do not participate in programs that promote integrated rural tourism. Of the respondents that stated others as the challenges within their business, 5.7% of them participate and 5.4% do not participate in programs that promote integrated rural tourism.

Table 5

Challenges Implementing Innovation and participation in local/governmental programs

V = 28.091, p <.001; The Chi-square statistic is significant at the .05 level

After analyzing the data, it was found that х²=28.091 and the p value is p<.000. What the data shows is that there is a significant difference between what types of challenges an organization has within their business and whether or not their organization participates in programs that aid in integration of rural tourism.

When taking a look at the data shown in Table 6 we can see that of the respondents who have the lack of knowledge as a challenge within their business, 55.3% of consider them-selves to be a part of the innovation ready group and 52.5% of them consider themselves to be a part of the non-innovation ready group. Of the respondents that have the lack of willingness as a challenge within their business, 1.2% of consider them-selves to be a part of the innovation ready group and 65% of them consider themselves to be a part of the noninnovation ready group. Of the respondents that have reported the lack of resources as a challenge within their business, 76.5% of consider them-selves to be a part of the innovation ready group and 67.5% of them consider themselves to be a part of the noninnovation ready group. Of the respondents that have the lack of employees as a challenge within their business, 55.3% of consider them-selves to be a part of the innovation ready group and 55% of them consider themselves to be a part of the noninnovation ready group. Of the respondents that have the lack of operational procedures as a challenge within their business, 45.9% consider them-selves to be a part of the innovation ready group and 12.5% of them consider themselves to be a part of the noninnovation ready group. Of the respondents that stated others as a challenge within their business, 5.9% of consider them-selves to be a part of the innovation ready group and 5% of them consider themselves to be a part of the non-innovation ready group.

Table 6

Challenges Implementing Innovation and Innovation Readiness

*X = 79.969, p <.001; The Chi-square statistic is significant at the .05 level

After analyzing the data, it was found that х²=79.969 and the p value is p<.001. What the data shows is that there is a significant difference between what types of challenges that an organization has within their business and whether or not they consider their business to be a part of the innovation ready group or the non-innovation ready group.

Conclusions

When evaluating an organization's readiness/capability to incorporate innovations, one must look at important characteristics of a company that include, external knowledge, openness, market strategies customer focus, employee involvement and training. All characteristics that, when valued on scale of positive, neutral and negative points, can distinguish whether your company has the necessary tools and capabilities in place to be considered a part of the innovation ready group or non-innovation ready group. This evaluation also highlights a company's strengths and weaknesses, this empowers organizations to pinpoint the challenges they face; like having a lack of knowledge, resources, willingness, operational procedures or qualified employees, in order to know how they can improve towards an innovative solution.

One way to analyze the integrated innovation within rural tourism organizations is known as the Innovator's method. The Innovator's Method is an attempt to provide a simple approach to innovation processes. The Innovator's Method is a holistic paradigm that combines several existing product development techniques into a single one. The Innovator's method begins with getting insight into the customer's wants, then thoroughly investigates the company's difficulties in order to generate various solutions through rapid prototyping, and finally aligning the solution with a business model and scaling up the solution. Another way is known as the IC-Index structure. The IC-Index structure is made up of two parts: a thinking component called human capital (Human and Intellectual Agility), and a non-thinking component called structural capital (Relationships, Organization, and Renewal and Development). This method looks into the attitude of such companies by analyzing the intelligence of its people and financial decisions. By incorporating and dissecting such methods, rural tourism organizations can evaluate its integrated innovations within its business.

The results of the study, showed that after evaluating the participants responses, it was concluded that in regards to the innovation readiness of rural tourism organizations within Lithuania, the majority of respondents are not yet ready nor have the capabilities present to integrate innovation within their business. After analyzing the obtained data from the aspect of types of innovation, determining factors, integrated rural tourism, challenges and methods of evaluation, the majority of rural tourism organizations are still in the infancy stage of their journey to be able to fully commit to having an integration innovation system. As well results shows is that there is a significant difference between what types of challenges that an organization has within their business and whether or not they consider their business to be a part of the innovation ready group or the non-innovation ready group.

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