A Schumpeterian approach to examine the development boundary of casino tourism

In The Theory of Economic Development, Joseph Schumpeter ([1934] 1983, Chapter II) explicates how the dynamic role of innovative mindset and ability of entrepreneurs, through introducing new methods of production and new economic commodities, leads up to the expansion of the boundary for economic/industrial development. By following Schumpeter’s approach, we explore the development boundary of casino tourism. Through a post facto analysis of the hard evidences derived across the world (e.g., Las Vegas, Macao and Singapore) since the 1980s, the dimensions of innovation to the development boundary of casino tourism are scrutinized and explicated. Besides, we uncovered that the expanding capacity and changing institutions of casino tourism generates positive feedbacks which further stimulates the progressive changes in the innovative process. Nevertheless, different from the industrial world being examined by Schumpeter, casino tourism supplies leisure and related hospitality services by incorporating a unique component of casino gaming. In practice, innovations in casino gaming may promote gambling behavior by various communities which is not necessarily a socially desired consequence. This actually generates a new form of negative externality that may as well set a limit to the industry’s development boundary at both the regional and global levels