Understanding the impact of the inherited institutional environment on tourism innovation systems in resource dependent peripheries: a case study of the Flinders Ranges in South Australia

The purpose of this dissertation is to use the theoretical foundations of the 'staples thesis' to analyse and explain how the institutional environment inherited from resource dependence influences the capacity of peripheral regions to operate as regional tourism innovation systems (RTIS). The staples thesis is a theoretical approach to explaining processes of economic growth and development in peripheral economies that rely on the export of unprocessed natural resources – the 'staples'. It suggests that the institutional environment resulting from a long-term dependence on staples export can become locked-in to the extent that the economic system becomes unable to change. The implications of this 'staples trap' are that the system struggles to innovate and diversify for reasons such as the adoption of an export mentality and the continued preference for importing external (financial and human) capital over developing capital internally. The staples thesis, with its concept of the 'staples trap' as a form of institutional lockin, offers considerable potential to help explain why resource dependent regions in developed countries (such as Australia, Canada, the United States, and New Zealand) often struggle to develop tourism as a successful alternative industry. The research is based on the analysis of a case study in the Flinders Ranges – a traditional resource periphery in South Australia that has tried to diversify its regional economy over the past decades by developing tourism. The case study examined the characteristics and performance of the Flinders Ranges tourism destination from a RTIS perspective to identify how the tourism destination system has been affected by the inherited institutional environment. The research used Carson and Jacobsen's (2005) systems-of-innovation framework for regional tourism as an analytical framework. This framework outlines a number of systemic requirements that are critical for well-functioning RTIS, including: entrepreneurship, economic competence, networks and clusters, critical mass and diverse development blocks, the production and distribution of knowledge, productive public sector contributions, a favourable institutional infrastructure, and the quality of social, political and cultural capital. Case study methods included semi-structured in-depth interviews, document and website analyses, analysis of secondary data sources, and personal observations. The findings suggest that the institutional environment inherited from the region's traditional staples industries (agriculture, pastoralism and mining) has clearly reduced the capacity of the local tourism system to operate as a RTIS. Locals had only limited entrepreneurial capabilities and skills in tourism due to an entrenched culture of reliance on government and external wholesalers for investment, employment, knowledge transfer and control of production and distribution. Locals had a limited tradition of networking, collaboration and knowledge exchange because they had never learnt such practices in the past when they had to deliver homogenous bulk commodities to external wholesalers. In addition, government intervention in tourism was often characterised by an inherited 'staples export mentality'. Government strategies aimed to convert tourism into a new export industry and continued to target largescale development and external investors instead of building local capital. Despite these limitations, the case study found that the Flinders Ranges tourism system has undergone a number of slow but significant changes since the mid-2000s, which have increased the system's capacity to operate as a RTIS. The most prominent changes included: an increase in the number of skilled tourism entrepreneurs; the emergence of a new networking and learning culture among local tourism operators; a new focus on local training and capacity building; and the increasing public sector support for locally driven cross-regional tourism projects. These changes emerged as a result of the in-migration of externally trained entrepreneurs and public sector leaders who introduced new knowledge, practices and attitudes to the region. This thesis argues that peripheral regions with a long history of staples dependence, like the Flinders Ranges, require profound changes in their institutional environment to be able to operate as well-functioning RTIS. Tourism is not an 'easy' alternative to back up existing resource economies in times of economic crisis. Instead, it is a new industry that requires the whole system with its collective of stakeholders to fundamentally change previous ways of operating. Such institutional change is very unlikely to emerge from within the local economic system. In the case of the Flinders Ranges, institutional change was a slow and incremental process that was facilitated by 1) the import of external human capital, and 2) the willingness to gradually integrate external with local human capital so that locals could 'learn' new (and simultaneously 'un-learn' old) practices and attitudes. The research concludes that analysing tourism destinations as RTIS under the particular light of the staples thesis offers a new and better way of explaining system dynamics and innovation capacities of destinations in resource dependent peripheries. Applying a staples thesis lens to the analysis of peripheral RTIS can add a more evolutionary institutional perspective to generic systems-of-innovation analysis in tourism, which has so far been relatively static. Building on Carson and Jacobsen's (2005) systems-of-innovation framework for regional tourism, this dissertation provides an enhanced theoretical framework that recognises the role and impact of the inherited institutional environment in shaping tourism innovation dynamics. The framework is built around a familiar case study methodology that allows for ongoing comparative research and further theory building in the field of peripheral tourism studies.