CONFERENCE ON GLOBAL TOURISM GROWTH: A CHALLENGE FOR SMEs

There is growing awareness that the SMEs in a value chain are strongly disadvantaged due to asymmetries of information and power in the chain, with few opportunities of upgrading. However, it is argued that technological innovation and the advent of the Internet have diminished many of these asymmetries between larger and smaller actors. This paper intends to offer an outline of the global tourism value chain, explore how technological innovations have impacted its governance. It also outlines the emerging paradigm shift as well as the increasing role of consumers in the Global Value Chains of the tourism industry. INTRODUCTION The value chain model, since its conception by Porter (1985), has been extensively used by researchers (e.g., Dicken, 1992; O'Sullivan & Geringer, 1993; Dekker, 2003) to map the organizational and industry level linkages and networks and to analyse and describe where value resides at these two levels. It has also been used by economists (e.g., Humphrey & Schmitz, 2002; Kaplinsky, 2004) to explain the little correspondence between the geographical spread of economic activity and the spreading of the gains from participating in global product markets as well as to identify causal links between globalization and economic inequality in order to identify ways to arrest these unequalizing tendencies of globalization. One central issue in the value chain approach is the one of “value chain management” or “value chain governance”. These terms are used to describe all efforts aiming to systematically reduce any sources of uncertainty in supply and demand through the active co-operation of the key actors in the value chain. By reducing uncertainty, total service is improved and overall cost is reduced (McGuffog & Wadsley, 1999). However, this also means that some firms in the chain determine and/or impose the parameters under which others in the chain operate (Humphrey & Schmitz, 2001). Kaplinsky (2004:85) distinguishes three forms of value chain governance: legislative (setting the standards of production and delivery), judicial (monitoring conformance with the standards set) and executive or proactive (helping actors in meeting the standards set). There is growing awareness that, in the wake of globalization, the SMEs in a value chain are strongly disadvantaged due to asymmetries of information and power in the chain, with few opportunities of upgrading. However, it is argued (e.g., Caskey, Hunt & Browne, 2001; Levy, Loebbecke & Powell, 2001) that technological innovation and the advent of the Internet has diminished many of these asymmetries between larger and smaller actors through the simultaneous explosion of global customer reach as well as access to and sharing of rich information.