It is not the development level in an economy that depicts the success gained in the future by that economy. Growth in economy is dependent mostly over a willingness of a country and ability of constantly calling itself under questioning and adapting to the changed situations. From this perspective, innovation leads not only to destruction creatively of present structure, but it further helps in developing and completing the offer that is already present in a particular economy (Hansen, 2011). Therefore, they have an influence of cumulative nature. A steady innovation flow attributes to constant research and development investments results in producing high growth disproportionately within the GDP. Also innovations have the public goods nature, since the dissemination process through imitation that they require to advantage the whole economy, instead of simply individual organizations.
High quality and uniqueness allows industries related to tourism for compensating the costs and disadvantages of price that go along with various sector related small businesses (Hansen, 2011). Service providers need to try as much as they can for attracting and keeping the customers repeatedly. Customers remaining loyal are generally those that reluctance to habitual changes. They do not indulge in contributing to behaviour oriented on innovation on the entrepreneurs part responsible for managing the SMEs related to tourism within the destinations. The intercontinental and exotic markets opening has resulted in various countries to emerge that were the key tourists sources of a global industry of travel, which is dominated through major companies (Hurley and GA, 2012). Hotel chains, airlines and companies for car renting have the ability of controlling the visitors flow due to products standardization. Such corporations are in a circumstance of competition of oligopolistic nature. They should consistently innovate for ensuring that their products offer quality always at a price which is affordable, allowing them to have the ability of competing against any new comer. Competition within the global industry of travel is to certain extent, based on innovation.
Basic innovations are not subjected towards the process of planning: Basic innovations do not have subjected to planning. They result from newer discoveries which, often never reach markets in goods or services form or are doing so only after some time has passed (Foley et al., 2010). The basic innovations consequences which as per Schumpeter results in stimulating the cycles of Kondratieff and leads towards much lasting economic prosperity periods which are not possible to be predicted. Essential innovations within the transport means have had a revolutionary influence over tourism in manners that non-can foretell. Planes, trains and the shortened distances of automobile reduce time of travel and prices (Schmitz et al, 2012). Such innovations lead towards large tourism centres creation, essential growth spatially and the remote markets opening up. Essentially, the state is responsible for supporting the basic research leading towards essential innovation.