advantages and contraints
The application of the social economy to rural tourism development in Canada can best be characterized as an emerging area of study. For rural economies affected by disinvestment in manufacturing, resource extraction, agriculture, and increasing global competition facilitated by relaxed trade barriers, the development of a tourism economy can be an attractive alternative (Mair, 2006). In exploring the potential role of the social economy within this development, several broad areas of advantage can be identified, including the support and utilization of community capacity, a lack of reliance on traditional sources of private capital, the retention of tourism benefits within the community, and the ability to support succession planning. Though not an exhaustive list, these areas of benefit should be considered to justify the further
examination of the use of the social economy in rural CBT.
A first area of advantage is how social-economy enterprises focus on community and the development and utilization of community capacity. A core property of CBT is the development of tourism for community benefit, with control of tourism development resting in the hands of community members, rather than in those of private developers (Blackstock, 2005). The creation of not-for-profit tourism advocacy or development associations is an example of how communities can develop a united voice for industry and community, as well as pool resources and expertise among members. This type of partnership approach can be leveraged to link across scales from the local to the national or international (Milne & Ateljevic, 2001), opening up new opportunities, such as sources of investment and expertise. These types of partnerships can also expose a community to increased pressure from partners and provide an entryway for unwanted development and exploitation (Bahaire & Elliott-White, 1999). Despite this possibility, the use of socialeconomy enterprises can begin to fulfill much of the rhetoric surrounding CBT, moving it away from a process of external control to a type of tourism development and industry structure that is more the product of community members, for community members.
A second area of advantage examined is the use of social-economy enterprises as a way to support rural CBT without the use of traditional sources of financial capital. Credit unions are an example of a social-economy enterprise that provides loans to members that would otherwise not be made with conventional banks. In many rural communities credit unions represent the only local banking institutions, and accessing financial capital and services locally is an important
factor in the development of rural businesses. The use of outside financing can lead to higher levels of leakage, a loss of local control, and higher potential for exploitation. This underlines a third area of benefit to social-economy enterprises, that the potential for leakages of economic benefits outside of the community are reduced. Social-economy enterprises such as Le Village de l’Acadie were developed by locals to promote culture and generate employment, with the expressed goal of keeping tourism benefits within the community. This
contrasts to development via external tourism industry players, where the risk of leakages are greater (Briedenhann & Wickens, 2004). This emphasis on the retention of community benefits is also evidenced in the FARMED tour operators: As an organization of local landowners and tour operators the benefits obtained through cooperative marketing are accrued to members. As entrepreneurial and community-based enterprises, these examples of the social economy fulfill fundamental goals of CBT: the retention of community benefits and the minimization of economic leakage (Jamal & Getz, 1995; Lane, 1994).
A fourth area of benefit is the potential for social-economy enterprises to overcome challenges of succession in rural businesses. The continuity of rural businesses is a challenge tied to rural depopulation and changes in rural demographics, where small business owners, upon retirement, close a business rather than pass it on to children or sell it to other operators (Getz & Carlsen, 2000). Social-economy enterprises avoid this succession gap by having multiple ―owners,‖ such as in a cooperative. In a cooperative, ownership, risk, and financial benefit are distributed among the shareholders, so that resources may be pooled to achieve a scale of impact that would otherwise not be possible. This organizational structure is more fluid, providing for the ability of members to leave and new members to join (Carpi, 1997). By spreading responsibility between many members, a co-op member who wishes to leave can sell his or her share to the other members or to a new member and the cooperative can continue functioning.
Despite the benefits of applying social economy to rural CBT, there are a number of constraints and challenges to their implementation. These challenges are generated by factors at the site of tourism production, including the specific community context and process of developing a social-economy enterprise itself, as well as externalities over which communities may have little control (Milne & Ateljevic, 2001). At the community level, tourism development is a highly
contextual process, and as such the internal dynamics and attributes of each community can greatly affect the path of development. For example, CBT development in rural areas may be limited by characteristics such as a lack of infrastructure, whether in the form of a highway link, the availability of Internet access, or opportunities for skills training. The social economy can play an advocacy role in these developments, encouraging the input of external capital and expertise, whether public or private or making connections with outside institutions, such as universities and community colleges (Gurstein, 2000). In addition to contextual CBT development challenges, there are numerous challenges to creating and operating a social-economy organization itself. The successful development of a social-economy enterprise is based on the willingness of participants to cooperate and work together for mutual benefit. As largely volunteer-run organizations, social-economy enterprises also face difficulties with
attracting and maintaining volunteer interest and engagement (Irvin & Stansbury, 2004; Wilson, Fesenmaier, & Fesenmaier, 2001). This type of collaboration may be difficult to accomplish due to a weak history of cooperation among members of the same community or among communities within a region (Markey, Halseth, & Manson, 2009). Also, as not-for profit organizations, it may be difficult to ensure the long-term viability of social-economy enterprises. Financial security is not a goal for all social-economy organizations, but for more market-oriented ones, becoming self-sustaining financially can be a struggle (Lukkarinen, 2005).
Ultimately many social-economy enterprises may not need to turn a profit. For some organizations, a lack of profits is beside the point: a nonmarket service or good is provided to society or membership at large. The Bruce Trail is an example of this, as an attraction that itself does not need to earn income to operate but in turn generates cultural and financial benefits for nonmember citizens and private businesses in the local area.
Lastly, there are substantial challenges to the development of rural tourism that are often beyond the direct influence of communities. These types of externalities include global economic trends and fluctuations, such as the recent economic troubles in the United States that greatly affected travel to Canada. Similarly, national monetary policy can create situations that are more or less favorable for tourism destinations, depending on their visitor markets. These types of tourism development challenges are not unique to rural communities, but it is possible that
the social economy in its various forms can be used to buffer a local tourism industry from these effects. The mutual, community-based ownership model of the social economy, coupled with a lack of a profit-driven motive, is a type of economic organization that would be better positioned to navigate these turbulent economic cycles, effectively ―internalizing the externalities‖ that adversely impact privately held tourism businesses (Novkovic, 2008, p. 2173).
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