2. 14 BRAUN
tion and customization are among the new demands namic and maximized regional assets (Amin, 1999;
of the knowledge economy, whereby mass markets Cooke, 1996), innovation programs are designed to
are a phenomenon of the past and interactive mar- stimulate learning, innovation, and regional devel-
kets of one are the future (Wind & Mahajan, 2001). opment. The latter have also proven advantageous
One consistent pattern in the new economic busi- towards enhancement of business performance, col-
ness process is the complex networks of interaction, laboration, and networking (Cooke & Wills, 1999;
whereby emphasis on collaboration between firms Henderson, 2000). Indeed, what was once endog-
is placed as the key for new models of innovation enous regional development has evolved into an
(Marceau & Dodgson, 1998). Research indicates that exogenous network or associational development
network building is not only a major new source of paradigm (Amin & Thrift, 1995; Cooke, 1996;
competitive advantage for any company, but a cru- Cooke & Morgan, 1998; Diez, 2001; Morgan 1997;
cial asset to business survival and an essential glo- Nouwens & Bouwman, 1995).
bal and, indeed, regional management requirement
(Chisholm, 1998; Davis & Meyer, 1998; Martinez- Networks of Interaction
Fernandez, 1999; Milton-Smith, 1998; Porter, 1998).
Network formations may vary from existing clus-
The very awareness of competitive international
ter consortia to loosely coupled business systems,
opportunities, and threats, has put regional interests,
online networks, or emerging grass-roots economic
and hence the interests of small and medium-size
community developments. No matter what the for-
enterprises (SMEs), back on the agenda (APEC,
mat, generally their aim, and the aim of regional
2001; Boekholt, 1997). Regional innovation and
policies, is to develop a more effective and prosper-
growth theories in particular are focusing on the
ous business sector through interfirm cooperation,
emergence of networks and the development of re-
knowledge, and resource sharing (Chisholm, 1998;
gional economic communities, whereby policy mak-
Diez, 2001). In the context of emerging technolo-
ers concerned with the performance of regional
gies and related knowledge–economy business mod-
economies are seeking to foster a networked com-
els of linking stakeholders in dynamic clusters
munity culture (APEC, 2001; Martinez-Fernandez,
(OECD, 1999), connectivity is revitalizing conven-
1999).
tional reasons for clustering (e.g., creating critical
mass), as it can help facilitate the knowledge-based
Regional Innovation
infrastructure network imperative for today’s com-
Regional development literature has proliferated petitive advantage (Porter, 1998).
in the last decade (Amin, 1999; Cooke & Morgan, It is believed that the prime driving force behind
1998; Diez, 2001; Henderson, 2000; Storper, 1997) regional economic growth is no longer just the physi-
with networking, learning, and regional development cal attributes of a region, but the social capital em-
being portrayed as pivotal linkages for regional de- bedded within the region (Diez, 2001). Recogniz-
velopment and growth. In what Cooke (1996) ini- ing that economic growth is accomplished by
tially termed a networked regional innovation ar- designing regional policy initiatives that stimulate
chitecture, a rapidly growing body of literature learning, regions are being turned into so-called
suggests that across continents regional innovation learning regions in which socially a variety of agents
policy makers are planning and implementing net- and institutions take part in interactive learning
work-based innovation policies. Examples of the cycles (Henderson, 2000; Morgan, 1997). Thus, by
network trend may be found internationally on the entering into an interactive learning process, regions
European Commission and the APEC action agen- can create competitive advantage. Although it may
das to build flexible partnerships and regional net- be argued that by developing infrastructure and by
works (APEC, 2001). Stimulated by research pio- sharing new technologies, regions are able to reduce
neered in regional settings both in Europe and uncertainty for their industries and produce positive
America, where evaluated regional economies dem- economic results, measuring the success factors of
onstrated that learning and knowledge transfer such linkages as networks, learning, and regional
through “networking” made the regions more dy- development is still in its infancy. Despite this popu-
3. NETWORKING TOURISM SMES 15
larly adopted regional development agenda, little Albeit somewhat slow in the uptake and initially
empirical evidence is available as to its merit trailing business-to-consumer (B2C) and consumer-
(Maskell, 1997). to-consumer (C2C) systems, travel and leisure book-
Having examined the adoption rate of regional ing sites, retail, and business-to-business (B2B) e-
innovation systems, Bergman (2001) asserts that commerce exchanges, often referred to as portals,
policies that work indirectly through the market are rapidly becoming the norm in Australia (Wil-
structure of regional economies are preferable over son, 2000). The popular media predicted that by 2001
direct intervention through innovation agencies. more than 80% of large Australian organizations
Focusing on the dynamic nature of the new economy, would support industry-specific B2B portals or some
others (Maskell & Malmberg, 1999; Storper, 1997) form of online clustering to accommodate B2B re-
point out it is the capacity to learn and adaptation sources, extranets, customer and supplier integra-
rate to change that defines the success of a region. tion as well as other interorganizational processes
Most important perhaps are the evaluation methods (Harpur, 2000). While such forecasts are not easily
themselves, which are in need of reassessment. verified, the prevailing view is that network exter-
Evaluation models such as measuring adoption, eco- nalities such as Internet portals and new e-commerce
nomic impact, or monetary cost/benefit ratios are technologies are necessary to transform business
conspicuously traditional for this new generation of capabilities from a parochial to a global level (Dav-
pluralist innovation policies and should be supple- enport, Jarvenpaa, & Beers, 1996; Goolsbee, 2000;
mented by innovative (e.g., interactive) and partici- Murray & Trefts, 2000).
patory evaluation processes (Diez, 2001). By facilitating B2C and B2B horizontal and ver-
tical trading via automated e-commerce engines, the
SME Networks latest IT solutions are being touted as collaborative
e-commerce solutions in which strategic industry
Australian industry sectors that will most likely alliances are key. Companies such as SAP promote
benefit from networking and related expansion into global solutions through customized supply chain
the e-commerce arena are expected to be those that interfaces in which “customers, employees, suppli-
offer products and services that are amenable to e- ers and business partners work together in one vir-
commerce. These sectors include information tech- tual business environment as if they were all one
nology, tourism, entertainment, banking, and finance company” (SAP, 2000, p. 16). Many such business
(NOIE, 2000a). The entertainment and tourism sec- applications revolve around supply chain partnering
tors are currently peaking 5% higher than other approaches and tend to focus on the needs of large
Australian industry sectors. The tourism sector per- enterprises rather than on the needs of the trading
formance level may in part be attributed to the fact community (Forrester Research, 2001a).
that large Australian tourism enterprises have em- Although technology providers are breaking out
braced information and communications technolo- of the corporate straightjacket and appealing to
gies such as global reservation systems (Applebee, SMEs to tap into networked business solutions
Ritchie, Demoor, & Cressy, 2002), and in part to the (Hayes, 2001), such environments are not likely to
reduced cost of distribution Web-based travel ser- be conducive to SME network adoption, or the fos-
vices provide (Pappas, 2001). Whereas intermedi- tering of collaborative networks, without address-
aries such as travel agents were once indispensable, ing the needs of the trading community (Braun,
travelers can now enter their preferences—such as 2001). B2B marketplaces tend to create value in
an airline, destination, desired travel times and generating lower prices for buyers and streamlining
dates—directly into a selected online booking sys- buyer and supply chain operations, neither of which
tem, which then processes the information and de- are core objectives for nonaligned service industry
livers a choice of options along with a secure trans- SMEs such as Australian tourism operators. In ad-
actions environment. Australian airline Qantas dition, the B2C market the focus of today’s e-com-
asserts that 70% of its airline ticket sales (which in- merce customer has shifted from early adopter firms
cludes phone reservations and Web-based transac- to proven value and brand companies, which favor-
tions) now take the form of e-tickets (NOIE, 2000b). ably positions many of the larger companies with
4. 16 BRAUN
an off-line established customer base and recognized ture and critical mass of personnel. In contrast, a
branding (McKinsey, 2000). SME networks may dismal 4% of small and medium-size tourism enter-
never be in a position to challenge large firms as prises (SMTEs) with an Internet presence were tour-
equals in the e-commerce marketplace, but even ism and travel businesses. It was hence seen as im-
within regional competitive domains, issues such as perative that SMTEs invest in skills and alliances to
network brand establishment and value for custom- exploit new technologies and emerging markets to
ers would need consideration. avoid potential loss of competitive advantage (CRC
Adoption of networked technologies by SMEs is Tourism, 1999). A more recent study conducted in
directly related to the size and nature of SMEs and the Canberra region (Applebee et al., 2002) con-
largely depends on their perception of affordability cluded that uptake had increased but that industry
and opportunities for their business (OECD, 2000). knowledge relating to the Internet still needed con-
In European studies on SME positioning in the new siderable expansion. Larger SMTEs used the Internet
economy (Cooke & Wills, 1999; Fariselli, Oughton, more than small SMTEs and nonusers had strong
& Picory, 1999), SME networking appears contin- negative perceptions on the effectiveness and adop-
gent on favorable economic climates (e.g., govern- tion of information and communication technolo-
ment-sponsored external networks), with such in- gies (ICT). While studies on the adoption of ICT
stitutional factors directly affecting the relationships are important, too few attempts have been made to
among different economic actors (Cooke & Wills, analyze the drivers leading to ICT changes in the
1999; Fariselli et al., 1999). In Britain commercial tourism landscape (e.g., strategic, environmental, and
application service providers are facing an uphill marketing-based drivers), which would considerably
battle with British SMEs showing no signs of inter- broaden the research platform (Tremblay, 2002).
est in networked technologies (Forrester Research, In the travel industry networks and new consortia
2001b). seeking aggregate selling and sourcing capabilities
Australian SMEs, which make up 96% of all Aus- are largely driven by the airline industry, which seeks
tralian enterprises in the private nonagricultural sec- extended global reach through strategically aligned
tor (Australian Bureau of Statistics, 2000), are likely partnerships and cost-saving synergies in services
to display similar reticence towards adoption of net- such as baggage handling, catering, engineering, and
worked solutions. New millennium research (NOIE, maintenance (Pappas, 2001). Large players with
2000b) indicates that SMEs still hesitate to invest economies of scope are clearly in a position to domi-
their time and money in a rapidly changing economy. nate the market, but under the right circumstances
The study cites issues such as fear of isolation, com- the role of regional tourism and SMTEs can be sig-
petitor use of the Internet, alienating intermediar- nificant (Buhalis, 2002; Prosser, Hunt, Braithwaite,
ies, uncontrolled growth, lack of technology skills, Bonnett, & Rosemann, 2000). In a decentralized
and lack of a strategic sense of how to move for- industry climate with low entry barriers, Australian
ward as significant uptake barriers (NOIE, 2000b). SMTEs can develop new service industry enterprises,
The cost of access to telecommunications networks create regional employment (Barry & Robins, 2001),
is relatively higher in rural areas, proving to be an- and attain a regional profile. SMTEs tend to operate
other limitation on the uptake of e-commerce in re- in isolation and many are still uncommitted to in-
gional areas (“Regional Centres,” 2000). These bar- dustry initiatives such as accreditation, training, mar-
riers tend to foster an element of inertia among keting, and visitor satisfaction (Tourism Victoria,
Australian SMEs in adopting technology solutions. 2001). Hence, value adding to their business through
Australian SMEs also perceive innovation policies the uptake of technology and partnership building
as pertaining to large firms and are hence suspicious to create competitive advantage is not a priority. In
of e-commerce regulations (NOIE, 2000b). addition, connectivity is not as prevalent in regional
A 1999 national tourism online scoping study and remote Australia as infrastructure representa-
(CRC Tourism, 1999) found that large companies tives would like us to believe. While new genera-
were adopting Internet technologies as a natural evo- tions of connectivity based on satellite and radio
lution of their business strategies with technology wave technology have great potential for regional
changes being facilitated by their existing infrastruc- Australia, today’s level of regional and rural con-
5. NETWORKING TOURISM SMES 17
nectivity is still a long way from broadband capac- on social contexts (Brown and Duguid 1998). A key
ity and, for often geographically dispersed tourism social concern inhibiting cooperation is lack of trust
operators, from reliably sharing resources and data. (Australian Bureau of Industry Economics, 1995).
Since joining an interfirm network will constitute Trust, or the lack thereof, is more likely to be an
an enormous conceptual leap into the future for many issue in networks than in one-on-one linkages, be-
SMTE managers, more attention will need to be paid cause the latter tend to be formulated as informal
to inhibitive uptake factors such as lack of infrastruc- rather than formal agreements (Australian Bureau
ture, fear of competitors, and lack of strategic direc- of Industry Economics, 1995).
tion in the new economy (Crase, Lamb, & Patullock, There is a considerable body of literature on in-
2000). Considering that moving up the value curve terfirm trust. SME fear of opportunistic behavior
in the knowledge economy is likely to comprise a from competitors has alliance literature scholars
steep learning curve for all (Earl, 2000; Ghoshal, (Gulati, 1995; Fukuyama, 1995) stress the impor-
Bartlett, & Moran, 1999), e-commerce novices will tance of trust and personal interaction in interfirm
need substantial encouragement and support to make alliances. Not all researchers believe that alliances
them willing to take the e-business plunge. SMTE necessarily have to be based on trust, as long as sys-
value creation should initially focus on e-business temic mechanisms are in place that allow stakehold-
awareness among individual SMTEs to reduce iso- ers to have confidence that alliance partners will
lation and maintain core market reach in a rapidly exhibit cooperative rather than opportunistic behav-
changing economy (Braun, 2001). SMTE capacity ior and not take competitive advantage of knowl-
building will not only make e-markets more acces- edge-based exchanges (Beamish, 1987; Das & Teng,
sible, but also generate long-term support towards 1997). Others argue that trust can be built during
proactive economic intervention and partnership the relational exchange (Gulati, 1995; Ring & Van
building (Forrester Research, 2001a). de Ven, 1992). Alternatively, the trust may be his-
torical and already in existence between individuals
Partnership Building of different firms with interaction taking place in an
atmosphere of continued trust building between
In the past, Australian SMEs have not been known stakeholders (Konstadakopulos, 2000).
for their collaborative approach to business (Aus- As noted earlier, strategic alliances in travel and
tralian Bureau of Industry Economics, 1995). How- tourism occur predominantly between big players
ever, a relatively recent study of 2500 Australian (Pappas, 2001) (e.g., between airlines and hire car
SMEs on their involvement in business networks companies, between airlines and major credit card
noted a significant level of interest in networking or companies). In such alliances each business party
formulating networks in the future, indicating that has crucial roles to play, and must do so in an atmo-
networking is likely to become important in the busi- sphere of trust, unity, and collaboration. Airline al-
ness future of Australian SMEs (Dean, Holmes, & liances in Australia have predominantly been based
Smith, 1997). Two types of business networks, for- on specific agreements that do not require the ex-
mal and informal networks, were identified whereby change of sensitive commercial information and
formal networks constituted formal arrangements have operated without strong commitment (Tourism
between companies to consolidate resources and Futures International, 1999). Partnership and trust
informal networks were seen as loose arrangements building requires prolonged socialization and
facilitating information exchange. Service compa- externalization to assure stakeholder sincerity
nies were notably more likely to be involved in for- (Nonaka & Takeuchi, 1995). Anecdotal evidence of
mal and informal networking than manufacturing SMTEs in regional Victoria suggests that trust rela-
companies. tionships among regional actors are parochial and
Lack of suitable partners, lack of time, and lack built on long-term relationships. Steeped in socio-
of financial assistance were cited as inhibiting fac- cultural ties, the level of socialization and
tors for collaboration (Dean et al., 1997). Partner- externalization appears to depend on individual
ship building between firms is not solely contingent SMTE positioning within the destination hub and
on sourcing funding or technology partners, but also its access to embedded information channels.
6. 18 BRAUN
With networking on the rise, the opportunity ex- tomer tastes and circumstances, they are in danger
ists to cultivate a new ethos of connectivity, social- of being isolated and out of touch with changing
ization, and trust between Australian SMTEs, but market dynamics. To avail themselves of new data
such a collaborative or network culture would need mining technologies and updated market research,
to be fostered. Informal processes such as attending SMTEs would do well to partake in cooperative
seminars, local or regional association meetings, and online initiatives.
online chats with other firm managers can establish Cooperative marketing in the print and other con-
a high level of interfirm relationship building (Leana, ventional media has been in place in the State of
1999). Incremental and more formal levels of col- Victoria since the inception of a Regional Coop-
laboration can be introduced once SMTEs are re- erative Marketing Program (RCMP) in 1993. The
ceptive to transform relationships into dynamic co- program was developed by Tourism Victoria, the
operation between trusted SMTE partners within State’s peak tourism body, as part of its strategic
optimized information sharing environments. Such direction to develop integrated marketing cam-
information partnership environments should have paigns for all its product regions and gain com-
clearly defined collaboration benefits for participat- petitive advantage through regional cooperation.
ing SMTEs (e.g., saving time and resources yet re- Over the years Victorian product regions have aug-
taining locus of control) and be linked to tangible mented their visibility by developing cross-media
rewards (e.g., enhanced market visibility), global marketing campaigns, producing high standard
positioning, and strategic leverage in the new collateral conform with state funding guidelines,
economy through cooperative marketing incentives. and by harnessing regional industry dollars through
brochure advertising sales. While the RCMP may
SMTE Cooperative Marketing be termed a success by the latter standards, pro-
gram participation proved too costly for many
The digital marketplace not only brings rapid pro- SMTEs, which in some product regions resulted in
liferation of new products and services, but also new limited industry participation and program depen-
ways of marketing. Information technology is slash- dency on local government contributions. Last year
ing marketing cost, removing intermediaries, and the RCMP framework was remodeled to augment
redefining marketing relationships (Häubl & Trifts, industry participation by relaxing collateral pro-
2000; Rayport & Jaworski, 2001). Like the afore- duction guidelines and related pricing structures
mentioned economic and policy practices, market- and to stimulate cross-regional collaboration by
ing in the cyber age requires dynamic and innova- modifying the funding distribution (Tourism
tive strategies. Victoria, 2001).
All markets are complex no matter what mecha- As part of their cooperative campaign offering,
nisms are used by the buyer. Keeping up with rap- product regions have been actively courting indus-
idly changing marketing trends is a challenge for all try members to participate in new communications
firms but is particularly confronting for resource- channels (e.g., offering e-commerce services via
and time-poor SMEs. Whereas SMEs were once able their respective product region Web sites). By in-
to intuitively grasp their market, emergent digital cluding Web services in their cooperative campaigns,
technologies are increasingly altering market seg- product regions hope to get more operators on board,
mentation and market predictability, making small obtain a bigger piece of the state cooperative fund-
firms more vulnerable to market changes (Gaulden ing pie, and increase market share. Because no
& Jackson, 2001). RCMP regional Web directives are in place, product
For SMTEs the dominant functions of an online regions are implementing ad hoc Web services and
tourism business remain product promotion and in- participation schemes. In fact, regional e-commerce
formation (Applebee et al., 2002; CRC for Sustain- developments are in direct contrast to Tourism
able Tourism, 1999). Because SMTEs are relatively Victoria’s own lagging objectives to build a com-
new to the virtual world and have neither the exper- prehensive statewide site with listing, booking, and
tise for continuous digital brand building nor the transaction services for Victorian tourism firms
resources for compiling a complete picture of cus- throughout the product regions.
7. NETWORKING TOURISM SMES 19
Because increased numbers of SMTEs are seeking Most B2B portals still lack information exchange
a Web-based presence for information and marketing or interaction between stakeholders. However, there
purposes (Applebee et al., 2002), regional programs is a recent and rapid rise of interest in so-called en-
are not only competing with their own state peak body terprise portals (Harpur, 2000), which sport vertical
for the SMTE marketing dollar but also with numer- B2B functions—including information taxonomy,
ous independent commercial Web developers. Gen- content aggregation, publishing and industry links—
erally SMTEs are not in a position to afford listings as well horizontal personalization and virtual com-
on multiple Web sites, and anecdotal evidence in re- munity functionalities. By satisfying both relational
gional Victoria suggests that this smorgasbord of Web and transactional needs and fostering relationships
offerings has only added to technology uptake con- and networks of interest within these e-market places
fusion for SMTEs with limited knowledge of e-com- (Armstrong & Hagel, 1996), SMTE portals have the
merce and small marketing budgets. potential to engage SMTEs and become competi-
While independent Web developers can offer com- tive online networks.
prehensive Web services and a degree of tourism Earlier discussed network solutions appear ill
marketing, collaborative marketing is not a core suited for SMTE collaboration, and product region
objective. Cost versus prominence of listing on the portals would need to provide suitable SMTE train-
vast Tourism Victoria site and participation require- ing programs and beneficial economic frameworks
ments such as accreditation by 2003 may ultimately for SMTEs to be willing to participate. Cooperative
prove fatal for the state site. Having access to one- marketing programs would either need to raise
stop-shop marketing services within their product enough funds to provide these services or they might
region programs, which have established links to consider an alternative business structure (e.g., build-
state and national tourism marketing bodies, could ing a virtual cooperative).
present better value for money for SMTEs. How- Cooperatives are voluntary associations of indi-
ever, because SMTEs think with their hip pocket, viduals and small business owners formed to meet
regional marketing bodies responsible for product common economic, social, and cultural needs (In-
region marketing campaigns would need to aggres- ternational Cooperative Alliance, 1995); they merit
sively market such benefits. another look in the digital economic light. Coopera-
tives date back to the 1840s when British socialists
Tourism Cooperatives set up the Rochdale Cooperative in response to
changing economic times during the Industrial Revo-
With the rise of portals and Internet-based mar- lution (James, 1999). Their crucial feature is the link
keting, Victorian product regions are in an excellent between investment and return through participation
position to apply upstream reach and product rich- and ownership.
ness by extending their tourism marketing programs Australian cooperatives, which are predominantly
into Web-based cooperative marketing campaigns. associated with primary industries, have been on the
Given that the regional tourism strategy (Tourism wane due to industry deregulations and reduced lev-
Victoria ,2001) and general marketing trend is to- els of support (James, 1999). Restructuring of tradi-
wards relationship marketing, whereby firms adopt tional cooperative structures into shareholder-owned
a mix of cooperative and competitive strategies with companies, which can attract outside investment and
both clients and competitors (Young & Wilkinson, be listed on the Australian Stock Exchange, has,
1997), joining a regional industry B2C portal can however, provided a welcome boost to ailing Aus-
be advantageous for regional Victorian SMTEs in tralian cooperatives (Baker, 1998).
terms of pooling resources to conduct market re- Nelson (1999) compares today’s learning organi-
search and accessing market reach incentives, yet zations to early cooperative models, which made a
effectively compete with rival SMTEs. When such commitment to ongoing learning in order to com-
an industry portal is designed for concurrent B2B pete in a difficult business market and achieve com-
functionality, SMTEs can value add to their busi- petitive advantage for their cooperative organization
ness by accessing industry communication, support, by being risk-takers, partnership builders, profit-
and best practice content (Braun, 2001). sharers, niche marketers, and investor-controlled
8. 20 BRAUN
business innovators (Nelson, 1999). He might have perpetuate trust amongst regional SMTEs, which in
extended his comparison to industry networks, new- turn will produce know-how and regional economic
generation cooperative structures similarly commit- sustainability. Adding appropriate digital technology
ted to resource sharing and knowledge innovation solutions to successful cooperative practices should
in an unpredictable economy. Electronic technolo- result in a regional SMTE portal model that accom-
gies are already being used to improve communica- modates cooperative e-marketing objectives within
tion efficiency and effectiveness of cooperatives a structure that allows SMTEs to save time, save re-
(Nelson, 1999). Product region marketing coopera- sources, retain locus of control yet benefit from col-
tives in Victoria looking to enter the e-commerce laborative initiatives.
arena would potentially benefit from formulating a Because a cooperative portal has the potential to
cooperative or electronic business alliance for re- emulate all the benefits of a traditional cooperative
gional competitive advantage (Wilson, 2000). and achieve competitive advantage through niche
How does a virtual tourism cooperative equitably marketing, e-commerce procurement, SMTE infor-
capture value for regionally dispersed tourism op- mation exchange, and knowledge management, e-
erators with different income potential? There are cooperatives may well emerge as a significant 21st
many ways to structure a cooperative B2C and B2B century SMTE online model.
portal (Kerrigan, Roegner, Swinford, & Zawada,
2001) and create an environmental fit to suit seg- Suggestions for Future Research
mentation, differentiation and position (Wilkinson
& Young, 1998). A traditional way is to link invest- This article has discussed how fostering of a cul-
ment and return with participation and ownership. ture of connectivity, networking, learning, and trust
A regionally dispersed shareholder-owned structure between regional Australian SMTEs may offer a po-
might also wish to explore outside investment, ad- tential solution to the possible loss of competitive
vertising, and sponsorship structures. Another way advantage in the new economy. Because networking
is to base subscription on the number of hospitality and cooperative relationships are considered prime
services the participating SMTE runs and the num- determinants of commercial success, Australian
ber of users for each. Yet another approach is to tie SMTEs have the opportunity to both collaborate and
cooperative membership fees to use of cooperative compete by joining a regional marketing portal
services (e.g., number of transactions, level of par- founded on cooperative principles such as sharing
ticipation in cooperative marketing campaigns) or resources and exchanging industry knowledge.
the size of the SMTE employee base using coopera- Having drawn on the interdisciplinary fields of
tive services (Kerrigan et al., 2001). networking, trust, and cooperative structuring, it is
Defining the right portal model for regionally dis- suggested that overcoming potential loss of com-
persed SMTEs is a difficult task. Given the reluc- petitive advantage for SMTEs in the digital economy
tance of SMTEs to enter e-commerce and embrace will require strategic SMTE community building
networked solutions, there is much to be learned with connectivity, collaboration, and trust as pivotal
from the communication and trust-building experi- building components. As with any new model, there
ences of stakeholders in existing cooperatives. Stake- is the danger that significant additional factors may
holders need to develop a clear understanding of not have been taken into consideration. While this
what they can gain from collaboration and what can article demonstrates that in the new economy the
keep them from being successful. By extending col- focus has to remain on individual SMTE needs rather
laborative marketing to the Web, it is necessary to than on networked technologies, there is much scope
take stock of the benefits of collaborative marketing for further cross-disciplinary research within both
by exploring a common sequence of issues, ques- theoretical frameworks and practical applications.
tions, and challenges and by identifying the motiva- SMTE positioning in the global marketplace, pub-
tion for collective action, key activities, available lic versus privately networked SMTE technologies,
resources, and stakeholder interests. Once individual SMTE relationship marketing, and industry-based
and collective goal orientation is realized, partici- SMTE capacity building are all timely research di-
pation in a regional industry cooperative is likely to rections for the knowledge economy.
9. NETWORKING TOURISM SMES 21
Biographical Note Thuringowa, Qld, September 8–12.
Brown, J. S., & Duguid, P. (1998). Organizing knowledge.
Patrice Braun holds a Masters by Research degree from James California Management Review, 40(3), 90–111.
Cook University of North Queensland in information delivery Buhalis, D. (2002). Conference reports. Tourism Manage-
via the Internet for community use. Ms. Braun is an e-business ment, 23, 427–428.
lecturer and consultant and is currently undertaking doctoral Cooke, P. (1996). The new wave of regional innovation net-
research in regional connectivity and electronic commerce with works: Analysis, characteristics and strategy. Small Busi-
a focus on the adoption of e-commerce and e-marketing tech- ness Economics, 8(2), 159–171.
nologies towards competitive advantage for small and medium- Cooke, P., & Morgan, K. (1998). The associated economy.
size tourism enterprises in regional Australia. Firms, regions and innovation. Oxford: Oxford Univer-
sity Press.
References Cooke, P., & Wills, D. (1999). Small firms, social capital
and the enhancement of business performance through
Amin A. (1999). International Journal of Urban & Regional innovation programmes. Small Business Economics,
Research, 23(2), 365–379. 13(3), 219–234.
Amin, A., & Thrift, N. (1995). Globalization, institutions Chisholm, R. F. (1998). Developing network organizations,
and regional development in Europe. Oxford: Oxford Uni- learning from practice and theory. Reading, MA: Addison
versity. Wesley Publishing Company.
APEC. (2001). Beijing Initiative on APEC Human Capacity Crase, L., Lamb, P., & Patullock, E. (2000). Using elec-
Building, May 15–16, Beijing [Online]. http:// tronic commerce to rejuvenate Australian regional com-
www.apec.org (retrieved 10/7/2001). munities: Competitive advantage or misplaced opti-
Applebee, A., Ritchie, B. W., Demoor, S., & Cressy, A. (2002). mism? Paper at the Communications Research Forum,
Internet use in the ACT tourism industry: An investiga- Canberra, October, La Trobe University, Albury/
tion into adoption, education and training needs. Paper Wodonga.
presented at the 12th International Research Conference CRC Tourism. (1999). Meeting the challenge, national online
of the Council for Australian University Tourism and tourism scoping study. IT program, CRC for Sustainable
Hospitality education (CAUTHE), Fremantle, Western Tourism, produced for the Office of National Tourism,
Australia, February 6–9. Department of Industry, Science and Resources, Canberra
Armstrong, A., & Hagel, J., III. (1996). The real value of on- [Online]. http://www.isr.gov.au/ tourism (retrieved 09/10/
line communities. Harvard Business Review, 74(3), 134– 2000).
141. Das, T. K., & Teng, B. (1997). Sustaining strategic alliances:
Australian Bureau of Industry Economics. (1995). Beyond Options and guidelines. Journal of General Management,
the firm: An assessment of business linkages and networks 22(4), 49–64.
in Australia. Research Reports, Productivity Commission Davis. S., & Meyer, C. (1998). Blur, the speed of change in
[Online]. http://www.pc.gov.au/bie/research/ rr67/ the connected economy. Oxford: Capstone Publishing.
index.html (retrieved 12/10/2001). Davenport, T., Jarvenpaa, S., & Beers, M. (1996). Improv-
Australian Bureau of Statistics. (2000). Small business in ing knowledge work processes. Sloan Management Re-
Australia 1999 (Cat. No. 1321.0). Canberra: Author. view, 37(4), 53–66.
Baker, R. (1998). Cooperatives. Bulletin with Newsweek, Dean, J., Holmes, S., & Smith, S. (1997). Understanding
117(6136), 44–47. business networks: Evidence from the manufacturing and
Barry, T., & Robins, P. (2001). Tourism trends and opportu- service sectors in Australia. Journal of Small Business
nities: What do they mean for regional Australia? Management, 35(1), 78–85.
Canberra: Bureau of Tourism Research. Diez, M. A. (2001). The evaluation of regional innovation
Beamish, P. J. (1987). Joint ventures in LDCs: Partner selec- and cluster policies: Towards a participatory approach.
tion and performance. Management International Review, European Planning Studies, 9, 907–923.
27, 23–37. Earl, J. M. (2000). Evolving the e-business. Business Strat-
Bergman, E. M. (2001). Innovation system effects on tech- egy Review, 11(2), 33–38.
nological adoption in a regional value chain. European Fariselli, P., Oughton, C., & Picory, C. (1999). Electronic
Planning Studies, 9(5), 629–649. commerce and the future for SMEs in a global market-
Boekholt. P. (1997). Innovative networks in regional econo- place: Networking and public policies. Small Business
mies: Enhancing infrastructures for technology creation Economics, 12(3), 261–275.
and transfer. In J. Mitra & P. Formica (Eds.), Innovation Forrester Research. (2001a). B2B partnerships fall short.
and economic development, university–enterprise part- Press Release June 11, 2001. Received via email June
nerships in action (pp. 119–137). Dublin/London: Oak 19, 2001.
Tree Press. Forrester Research. (2001b). Oracle faces uphill SME battle.
Braun, P. (2001). Regional tourism: Collaborative market- Press Release June 28, 2001. Received via email 11/7/
ing goes digital. Sustainable Economic Growth for Re- 2001.
gional Australia, 5th National Conference Proceedings, Fukuyama, F. (1995). Trust. New York: Free Press.
10. 22 BRAUN
Gaulden, C., & Jackson, W. T. (2001). Fuzzy marketing: favour large companies. Asia Pulse.
Implications for small business. Association for Small Milton-Smith, J. (1998). The value of networking SMEs: The
Business and Entrepreneurship Conference, New Orleans, Asia-Pacific experience. In P. Formica & D. Taylor (Eds.),
February 27–March 3 [Online]. http://www.sbaer.uca.edu/ Delivering innovation. Key lessons from the world-wide
Research/2001/ASBE (retrieved 18/07/2001). network of science and technology parks (pp. 225–248).
Goolsbee, A. (2000). Why the network effect is so striking. Campanillas, Malaga: IASP.
In T. Dickson (Ed.), Mastering strategy, the complete MBA Morgan, K. (1997). The learning region: Institutions, inno-
companion in strategy (pp. 21–64). London: Pearson. vation and regional renewal. Regional Studies, 31(5), 491–
Goshal, S., Bartlett, C., & Moran, P. (1999). A new mani- 503.
festo for management. Sloan Management Review, 40(3), Murray R., & Trefts, D. (2000, Winter). The IT imperative in
9–21. business transformation. Information Systems Manage-
Gulati, R. (1995). Does familiarity breed trust? The implica- ment [Online]. www.ebiztechnet. com members/online/
tions of repeated ties for contractual choice in alliances. 200702/alignment/alignment_1.html (retrieved 25/07/
Academy of Management Journal, 38(1), 85–112. 2000).
Harpur, P. (2000, July 25). Enterprises are an open portal. Nelson, W. J. (1999, July/August). Co-op member educa-
The Australian, Cutting Edge, p. 2. tion needed in 21st century. Rural Cooperatives, 22–23.
Häubl, G., & Trifts, V. (2000). Consumer decision making in NOIE. (2000a). T@king the plunge 2000: Sink or swim.
online shopping environments: The effects of interactive Canberra: Commonwealth Department of Communica-
decision aids. Marketing Science, 19(1), 4–21. tions, Information Technology and the Arts Common-
Hayes, S. (2001, May 1). Oracle network for SMEs. The wealth of Australia.
Australian, IT Section, p. 28. NOIE. (2000b). E-Commerce beyond 2000. Canberra: Com-
Henderson, D. (2000). EU regional innovation strategies. monwealth Department of Communications, Information
Regional experimentalistm in practice? European Urban Technology and the Arts Commonwealth of Australia
and Regional Studies, 7(4), 347–358. [Online]. http://www.noie.gov.au/publications/NOIE/
International Cooperative Alliance. (1995). Statement on the ecommerce_analysis/beyond2k_final.rtf )retrieved 26/9/
co-operative identity, ICA News, 5/6 [Online]. http:// 2000).
www.coop.org/ica/info/enprinciples.html (retrieved 21/ Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating
08/2000). company: How Japanese companies create the dynam-
James, D. (1999). Going forward, all for one and one for all. ics of innovation. New York: Oxford University Press.
Business Review Weekly, 21(30), 86. Nouwens, J., & Bouwman, H. (1995). Living apart together
Kerrigan, R., Roegner, E. V., Swinford, D. D., & Zawada, C. in electronic commerce: The use of information and com-
C. (2001). B2Basics. The McKinsey Quarterly, 1 [Online]. munication technology to create network organisations.
http://www.mckinseyquarterly.com/ article_page.asp (re- Journal of Computer-Mediated Communication, 3(1)
trieved 23/07/2001). [Online]. http://www.ascusc.org/jcmc/vol1/issue3/
Konstadakopulos, D. (2000). Learning behaviour and coop- vol1no3.html (retrieved 5/3/2002).
eration of small high technology firms in the Asean re- OECD. (1999). Boosting innovation: The cluster approach.
gion. ASEAN Economic Bulletin, 17(1), 48–62. OECD Conference Proceedings, June 1999 [Online].
Leana, C. R. (1999). Organizational social capital and em- http://www. oecd.org (retrieved 20/06/2000).
ployment practices. Academy of Management Review, OECD. (2000). A global marketplace for SMEs. Progress
24(3), 538–556. Report by the Industry Committee Working Party on
Marceau, J., & Dodgson, M. (1998). Systems of innovation. SMEs, OECD online publication [Online]. http://www.
Innovation Summit Learned Group Reference Paper oecd.org (retrieved 20/06/2000).
[Online]. http://www.isr.gov.au/industry/ summit/refer- Pappas, G. (2001). The next chapter in business-to-consumer
ence/learned_group/index.html (retrieved 26/09/2000). E-commerce: The impact of the Internet on the airline
Martinez-Fernandez, M. C. (1999). The network perspec- industry [Online]. www.bcg.com (retrieved 1/10/2001).
tive in regional regeneration: An organic analysis of the Porter, M. E. (1998). Clusters and competition. In On com-
Hunter Regional Network for Economic Development petition (pp. 197–287). Harvard Business Review Book,
(Hunter Valley, NSW, Australia). Proceedings 23rd Con- Harvard College, Harvard 1996.
ference of the Australia and New Zealand Regional Sci- Prosser, G., Hunt, S., Braithwaite, D., Bonnett, G., &
ences Association International, Newcastle, September Rosemann, I. (2000). The significance of regional tour-
19–22. ism. A preliminary report (Occasional Paper Number 2).
Maskell, P. (1997). Introduction. In Eskelinen (Ed.), Regional Lismore, NSW: Centre for Regional Tourism Research,
specialisation and local environment: Learning and com- Southern Cross University.
petitiveness. Stockholm: NordREFO. Rayport, J. F., & Jaworski, B. J. (2001). e-Commerce. Bos-
Maskell, P., & Malmberg, A. (1999) Localised learning and ton: McGraw-Hill.
industrial competitiveness. Cambridge Journal of Eco- Regional centres get a boost. (2000, August 15). The Austra-
nomics, 23(2), 167–185. lian, IT Section, p. 55.
McKinsey. (2000, August). E-Commerce market likely to Rheingold, H. (1993). The virtual community, homesteading
11. NETWORKING TOURISM SMES 23
on the electronic frontier. Reading, MA: Addison-Wesley Mapping the sources of innovation. Proceedings of the
Publishing. 12th International Research Conference of the Council
Ring, P. S., & Van de Ven, A. (1992). Structuring cooperative for Australian University Tourism and Hospitality edu-
relationships between organizations. Strategic Manage- cation (CAUTHE), Fremantle, Western Australia, Febru-
ment Journal, 13(7), 483–498. ary 6–9.
SAP. (2000, July 25). Delivery the business Internet, special Wilkinson, I., & Young L. (1998). Thoughts about compet-
advertising promotion. The Australian, Special Adver- ing: Beyond relationship marketing (draft paper for Re-
tising Promotion. search Conference on Relationship Marketing), Emory
Storper, M. The regional world. London: Guilford Press. University, Atlanta.
Tourism Futures International. (1999). Strategic evaluation Wilson, E. (2000, July 18). Cooperation at hub of top e-com-
of airline alliances. Proceedings of Aviation 99 Confer- merce model. The Age, IT News2, p. 3.
ence, Sydney, July 12–13. Wind, J., & Mahajan, V. (2001). Digital marketing. New York:
Tourism Victoria. (2002). Tourism Victoria’s strategic plan John Wiley & Sons.
2002–2006 (in planning phase) [Online]. http:// Young, L. C., & Wilkinson, I. (1997). The space between:
www.tourismvic.gov.au. (retrieved 10/3/2002). Towards a typology of interfirm relations. Journal of Busi-
Tremblay, P. (2002). Tourism & information technologies: ness to Business Marketing, 4, 53–97.
