Networking Trends of Small Tourism Businesses in Post‐Socialist Slovakia

Abstract

It is argued that the development of small economic enterprises is vital for transitioning economy (Gibb 1993; Gibb and Haas 1996). Small businesses provide an outlet for many specialized workers to start their own firm, thus providing foundation for newly transitioning economy (Erutku and Vallee 1997). This philosophy has led to a very substantial growth of the micro-small business sector over the past half-dozen years (Charap, quoted in Gibb 1993, p.461), and this growth is the reason for the expansion of many new firms, particularly in the service sector (Gibb 1993). Tourism development is playing strong role in the service sector boom. Research suggests that the industry can be an area of high growth during economic transition, due to the low requirements of human capital needed to gain entry (Szivas and Riley 1999). Academics have become interested in studying the interaction among firms, both large and small. Network theory, as applied to the business world, views businesses as spatial nodes and the interactions between them as linkages. Most academic literature on this topic is focused on manufacturing. A very small literature exists on the use of networks in the service sector, and even less on the sector. The greater attention to the manufacturing sector in networking studies is probably due to the historical importance of manufacturing in global economic development (Roehl 1998). However, with the service sector playing more prevalent role in the global economy, research pertaining to service sector networks is growing (Afford 1998; Echtner 1995; Roehl 1998; Selin and Meyers 1998; Shaw and Williams 1998). Whereas manufacturing firms network mainly for the purposes of resource and product development, service firms tend to enter partnerships more for marketing and training purposes. Afford (1998), for example, focuses on how regional tourist boards seek to establish market position, and how they benefit from networking with other sectors of the industry. Selin and Meyers (1998) investigate network usage by examining regional public/private association between agencies and public land management bureau. The goal of this article is to combine the fields of small business behavior, transition economies, and development. Specifically the reorganization of the industry within transition economy and the usage of networks by small businesses will be analyzed in case study of the Slovak Republic. Geographic differences between these small businesses and their use of networks will be an underlying theme of this research. Tourism in East Central Europe in the 20th Century East Central Europe is currently in political and economic transition. The post-WW2 adoption, and in most cases the recent dismissal, of communist ideology, will be briefly discussed within framework. The century will be divided into three periods: pre-social tourism, tourism, and post-social tourism. According to Vuoristo (1981), demand for in East Central Europe was relatively low before the 1950s. This was in part due to low disposable income among the local population and lack of interest from outside the region. A few exceptions existed, however, such as the isolated spa resorts found in East Central Europe that catered to the wealthy west Europeans and nobility. Thus, during this period domestic was almost nonexistent, and international tourists were few and spatially concentrated in spa regions. During the communist era, tourism's potential was eventually realized, demanding need for the formation of state-controlled agencies to administer activities (Kreck 1998). Domestic tourism, which was stressed over international tourism, was seen as necessary activity for the working masses, and has been dubbed social tourism in the literature (Allcock and Przeclawski 1990; Hall 1993, 1991). …