Tourism and its Contribution to Regional Development: Three Case Studies

Fast growing tourism industries have provided a focus for policymakers and academics concerned with regional and national economic development in periphery areas. General and, in the context of this paper, event tourism, comprise an important development platform for both periphery rural areas facing a bleak future due to depressed agriculture conditions, and for post-industrial and urban areas seeking new industries to replace traditional employment in manufacturing and slow growth service industries. The promotion of tourism and leisure service industries as a regional growth driver, particularly in peripheral regions, may ignore certain underlying industry characteristics. Often tourism features low wages and unskilled labour, lessening income-related demand effects, and, further, militating against the development of a highly skilled workforce. Moreover, external ownership of large tourism concerns, together with an underdeveloped local tourism infrastructure can limit the contribution of new tourism activity to regional growth prospects. This paper compares and contrasts the impacts of three very different cases of tourism development in Wales. The first case is the now well-established annual Brecon Jazz festival in mid-Wales. This internationally renowned event attracts 50,000 visitors per annum to a rural setting which faces increasing difficulties in traditional agricultural activities, and is searching for diversification opportunities. The second case examines the sustainable visitor related impacts of Blaenavon Industrial Landscape, an exceptionally well-preserved industrial heritage site in the South Wales coalfield. The area has recently received World Heritage Site status, and is to undergo significant preservation works and development of visitor facilities in the next few years. The third case examines the 1999 Rugby World Cup. The event was hailed as the world''''s fourth biggest sporting event and was hosted by Cardiff, the capital of Wales in the autumn of 1999. The local economic effects (forecast in the case of Blaenavon) of each development are examined and compared within the framework of Input-Output tables for Wales, augmented by tourism sector data. The paper examines the very different patterns of visitor spend associated with each case activity, and how far the effects of the activities being promoted square with local economic development needs. Implications for tourism development policy are examined in the context of the research findings. Bibliography: Department for Culture, Media and Sport (1999) "Tomorrow%27s Tourism: A growth Industry for the new Millennium" HMSO Fletcher, J. E. (1989). Input-output analysis and tourism impact studies. Annals of Tourism Research, 16: 514-529 Hill, S. & Roberts, A. (1998) %22Welsh Input-Output Tables for 1995" University of Wales Press National Assembly for Wales (2000) "Objective 1 Single Programming Document: West Wales and the Valleys" HMSO

Linking Innovative Potential to SME Performance: An Assessment of Enterprises in Industrial South Wales

The attraction of inward investment from the UK and from overseas was the main focus of regional development policy in Wales for much of the 1970s and 1980s. Whilst Wales has been particularly successful in attracting foreign enterprise, the contribution of new investors to improving longer term regional economic prospects has been questioned at several levels. With concerns over inward investor stability, embeddedness, and contribution to local value added, increasing weight has been given to the encouragement, and development of innovative indigenous SMEs in the Welsh economy. General and sectoral initiatives to encourage SME development and innovation in Wales have also taken place against a background of historically low levels of new firm formation in the region, together with the presence of factors expected to hinder SME growth including low levels of capital availability. Ultimately, it is hoped that a strongly performing indigenously controlled and innovative SME sector will go some way to improving regional growth prospects, and hence play a role in reducing the GDP per capita gap between Wales and the UK. During the 1990s a series of research and consultancy studies in Wales have been undertaken seeking to audit SME activities, define needs and identify market failures in provision of information and services. These have formed the basis of revised policy and then for new resource directions emanating at the European, regional and local levels. Encouraging innovative activity has been at the forefront of the network of initiatives currently underway in Wales. New initiatives have often been instituted without a clear appreciation of the nature of innovation, and how innovative activities link to innovative outputs and then feed through to improved business performance. This paper examines the link between innovative activity, outcomes and the performance of SMEs in Wales. A range of European, UK and locally developed initiatives in Wales seek to encourage innovative activity in indigenous SMEs. However, it is the contention of this paper that these initiatives have often been instituted without a clear appreciation of how, if, and which innovative activities feed through to improved business performance. The paper offers a general method of assessing the innovative potential (the configuration of management practices, capabilities, internal and external linkages facilitating the generation of appropriation of ideas) of manufacturing SMEs. This then leads on to an examination of how far innovative potential is connected to operational and general business performance. The paper describes how the model was developed and used to assess the innovative potential of a sample of manufacturing SMEs in Industrial South Wales, and how far the innovative potential can be linked to improved operational and business performance. The introduction to the paper reviews current literature on innovation in SMEs, and demonstrates how far recent studies have succeeded in measuring, and then linking innovative inputs of SMEs to innovative outputs and firm performance. The second section builds upon the review to develop a working model of an innovative SME. Innovation is considered not only in terms of new product or process development but more generally as practice. The model reveals the innovative firm as one that identifies, interprets, and applies knowledge effectively, and as appropriate throughout the organisation. The model described represents a synthesis of previous research. Key factors in the model include strategy and the techniques and practices deployed to facilitate the development and appropriation of ideas for innovation. Broadly this focuses on SME commitment to innovation, and management practices supporting this commitment. The third section describes how the model was operationalised into an auditing tool, and then used to assess the innovative potential of a sample of manufacturing SMEs in Industrial South Wales. The fourth section summarises the results from the initial research programme, and in particular, considers whether the unique operating structures usually associated with SMEs hinder or facilitate the adoption of new structures for organisational learning. Moreover the section examines whether the existence of certain configurations of practices coincide with improved business performance and operational efficiencies. The conclusions consider these results in the context of the directions being adopted by current regional SME policy initiatives in Industrial South Wales.

An investigation of key growth industry sectors in Wales using Multi-Sectoral Qualitative Analysis

This paper examines the problem of key sector identification in regional economies. Whilst the paper questions the desirability of policy focusing on the promotion of key sectors, it suggests that tools are generally underdeveloped to identify these sectors. The paper suggests that multi-sectoral qualitative analysis provides one means of forming conclusions on sector potentials.

Changes in Manufacturing Linkage Patterns in Scotland and Wales: Hollowing Out and Foreign Direct Investment?

Trends in inward investment in Scotland and Wales have influenced manufacturing’s inter-linkages with the local economy in different ways. The paper shows that there could be a hollowing out of the manufacturing sector in these regional economies which is linked to trends in inward investment.

Steel Manufacturing in Wales : Ensuring a Sustainable and Prosperous Future

This briefing reviews the current contribution of steel manufacturing to the Welsh economy and considers how new technological opportunities around decarbonising steel production – with potential to service the transitioning economy - might affect this contribution and the pattern of environmental effects connected to the industry. We address a series of factors that might be considered by policymakers in connection with the future evolution of steelmaking in Wales, where around 8,000 (largely full-time) people are currently employed in the sector, with an additional 2,000 or so full-time equivalent jobs in related activities, such as metal casting. However, the issues discussed are relevant to other parts of the UK with important steel manufacturing sectors such as Teesside. We set these in terms of considering the current economic contribution of the industry’s primary steel production with focus on Port Talbot, setting this contribution against the associated point source emissions. This enables consideration of the potential impacts and trade-offs in considering both the domestic impacts of industry change on jobs, incomes and regional unemployment challenges, and increased reliance on imported steel and its associated carbon emissions. We then consider potential options for, and implications of, decarbonising and/or change in the production profile of the Welsh industry, set in the context of potential market opportunities as economies move through the net zero transition

Responsibility for regional waste generation: A single region extended input-output analysis with uni-directional trade flows

The paper uses a regional input-output (IO) framework and data derived on waste generation by industry to examine regional accountability for waste generation. In addition to estimating a series of industry output-waste coefficients, the paper considers two methods for waste attribution but focuses first on one (trade endogenised linear attribution system (TELAS)) that permits a greater focus on private and public final consumption as the main exogenous driver of waste generation. Second, the paper uses a domestic technology assumption (DTA) to consider a regional ‘waste footprint’ where local consumption requirements are assumed to be met through domestic production.waste attribution; regional economy; input-output analysis; Wales

Reconsidering the calculation and role of environmental footprints

Following the recent Copenhagen Climate Change conference, there has been discussion of the methods and underlying principles that inform climate change targets. Climate change targets following the Kyoto Protocol are broadly based on a production accounting principle (PAP). This approach focuses on emissions produced within given geographical boundaries. An alternative approach is a consumption accounting principle (CAP), where the focus is on emissions produced globally to meet consumption demand within the national (or regional) economy1. Increasingly popular environmental footprint measures, including ecological and carbon footprints, attempt to measure environmental impacts based on CAP methods. The perception that human consumption decisions lie at the heart of the climate change problem is the impetus driving pressure on policymakers for a more widespread use of CAP measures. At a global level of course, emissions accounted for under the production and consumption accounting principles would be equal. It is international trade that leads to differences in emissions under the two principles. This paper, the second in this special issue of the Fraser Commentary, examines how input-output accounting techniques may be applied to examine pollution generation under both of these accounting principles, focussing on waste and carbon generation in the Welsh economy as a case study. However, we take a different focus, arguing that the ‘domestic technology assumption’, taken as something of a mid-point in moving between production and consumption accounting in the first paper, may actually constitute a more useful focus for regional policymakers than full footprint analyses

New directions in regional innovation policy: a network model for generating entrepreneurship and economic development

Lifting the economic performance of lagging regions continues to puzzle economic development practitioners and analysts. As a means of contributing some solutions to this puzzle, this paper examines a policy intervention that promotes regional development through a public–private-sector initiative that uses a network model to catalyze innovation-driven entrepreneurship. It focuses on a programme operated by the Alacrity Foundation in the region of Wales, UK. The paper argues that Alacrity’s model offers a novel means of attempting to facilitate regional development through a programme that intertwines elements relating to entrepreneurship, innovation, and network policy and practice. It is novel in the sense that it seeks to de-risk the entrepreneurial and innovation process in a regional environment that is not traditionally strong in this respect. It is concluded that such programmes indicate that policy is beginning to embrace a number of ideas emerging from theoretical work on the drivers of regional innovation and growth

Inward investment, transaction linkages and productivity spillovers

The article examines the extent to which foreign manufacturing firms in the UK promote productivity growth in the domestically owned manufacturing sector through their buying and supplying relationships. Evidence for intra- and inter-regional externalities from the presence of foreign manufacturing, and intraand inter-industry effects is brought to light. Externalities in the domestic sector are most noticeable where foreign manufacturing sells to domestic manufacturing. These externalities are, however, not wholly robust to different specifications of spatial dependence. The findings are positioned in a debate, which has tended to view backward (as opposed to forward) linkages from multinationals to domestically owned supply bases as a critical driver of indirect economic benefits. © RSAI 2004

Physical water use and water sector activity in environmental input-output analysis

This paper uses input-output accounting methods to identify the direct, indirect and induced physical demand for water. Previously the seminal work by Leontief (1970) has been employed to motivate a fuller account of issues related to sectors that generate and sectors that clean/treat polluting outputs (Allan et al 2007). The present paper extends this approach to deal with sectors that use a natural resource and the sector(s) that supply it. We focus on the case of water use and supply and a case study for the Welsh regional economy. The analysis shows how the proposed method, using both the quantity input-output model and the associated price dual, can be used to consider economy wide implications of the deviation between actual expenditure on the output of the water sector and actual physical water use. The price paid per physical amount of water appears to vary greatly amongst different uses. This may occur for various reasons. We argue that such analysis and information is essential for policy makers and regulators in understanding the demands on and supply of UK regional water resources, their role in supporting economic expansion, and can ultimately inform water sustainability objectives and strategies