Innovation in Services: The Case of Rural Tourism in Argentina

Abstract

We analyze the innovation process in the rural tourism (RT) sector in Argentina. The identification of a differentiated attribute is key for the success of RT initiatives. This often involves a collective action and a self-discovery process. As RT is a package of services, complementation among different providers is needed. Hence, public policies may facilitate coordination and cooperation among RT providers. The fact that RT groups are formed by small and micro producers located in rural and often poorly connected areas is the main obstacle for innovation. The effects of RT initiatives are hard to measure, but they are seemingly important at the local level.

KEY WORDS:

• rural tourism
• innovation in services
• social innovation
• coordination failures
• productive development policies

Notes

1. Pronatur was a joint initiative of Argentina’s Ministry of Agriculture, the Ministry of Tourism (MINTUR), and INTA. The program was discontinued in 2011 when allocated funds were exhausted but mainly due to differences among the involved organizations about the best ways to promote RT.

2. Radical innovations are those that completely change a firm’s business model.

3. Unfortunately, available data were not good enough to econometrically test our main hypothesis (e.g., scarce number of observations and possible statistical bias); hence, no quantitative analysis was conducted in this study.

4. The five groups are “De Pampa y Gauchos” (accommodation, food, tours, fishing, visit to olive plantations, watching production processes, Buenos Aires); “Meseta Infinita” (a group of farmers who organize tours in Río Negro); “Turismo Rural Campesino” (agricultural production and handicrafts in twelve local communities in Salta); “Turismo Rural en San Juan” (wineries and restaurants, visits to plantations, handicraft workshops, regional products, San Juan); and “Wine Route” (220 wineries in Catamarca, Córdoba, La Rioja, Mendoza [which concentrates 75 percent of the business], Neuquén, Río Negro, Salta, and San Juan).