Local Governance and Entrepreneurship in Tourism – a Comparative Analysis of Two Tourist Destinations

Literature suggests that local governance might encourage the emergence of innovative businesses. Little is known about that relationship in the context of tourism, although literature suggests governance as a way to deal with the problems of tourism destinations. Additionally, studies in entrepreneurship seldom focus on tourism. This study addresses these gaps by exploring the role of local governance in tourism entrepreneurship. The research strategy of the study is qualitative, using focus groups and semi-structured interviews with diverse local and regional stakeholders, from entrepreneurs to policymakers. Two municipalities in the Metropolitan Area of Lisbon serve as case studies. The differences in the entrepreneurial ecosystems of both territories relate to their distinctive stages of development as tourism destinations. Results suggest that the "good governance" model prevails but that a "one size fits all" approach is not helpful. Results also suggest the need for local governance models to evolve into modes of multi-level network governance, incorporating regional interaction and integration; and recognising participation as the key to democratic legitimacy, transparency, and effectiveness of public policies. With multi-level governance, public administrations at different levels of government are responsible for opening the decision-making process to other relevant actors in society. The study's theoretical contribution concerns the need to investigate hybrid governance models for tourism entrepreneurship. For practitioners (i.e., local decision-makers), this study highlights the advantages of flexibility and a multi-level approach to governance.