Exploring Service Innovation in Cultural Districts from a Collaborative Innovation Perspective: The Case of Beitou Hot Springs District in Taiwan Region ()
1. Introduction
In the post-pandemic era, under the pressure of economic recovery, experience-based service innovation has garnered significant attention from both industry and academia. Such innovation not only revitalizes and breathes new life into local areas (Ng, Chen, & Hsu, 2023), but also provides tourists with new experiences. However, innovation is not only driven by customer knowledge but also requires the collaborative efforts of various stakeholders to achieve new service models, a focus of both academic and practical interest (Nikolaychuk, 2021).
The presentation of cultural heritage is not just a collection of historical buildings but a fusion of history and landscape, embodying the overall value and atmosphere of regional culture and creating emotional appeal to residents and tourists alike. The concept of reusing old buildings, stemming from Europe and America, preserves the historical and aesthetic features of monuments, injecting new vitality into local characteristics development and incorporating conditions for technology facilities and experiential services to meet contemporary needs for living, education, and tourism, achieving community and stakeholder collaboration (Bandarin & Van Oers, 2012). Della Corte (2009) proposed analyzing service innovation in cultural heritage through three dimensions: technological, experiential, and systemic, suggesting the need to consider various institutional and policy implications, as well as cultural and social differences (Della Corte, 2009). In recent years, cultural districts have shifted from a conservation and protection mindset to actively managing revitalization, with strategy changes bringing about higher experiential demands for space (Ng & Chen, 2023). Moreover, customer experience-oriented service innovation is crucial for designing and improving services (Bitner et al., 2008). Therefore, how to address changes through experiential value-added service innovation represents a significant challenge that cultural districts must actively confront.
This study, through the backdrop of the Beitou Cultural District, discusses various issues related to cultural districts. Beitou’s hot springs, from ancient legends to modern tourist attractions, represent a shift from primitive beliefs to modern leisure culture. The hot springs not only provide a recreational venue for local residents but also attract numerous visitors to experience its unique cultural and natural beauty. In recent years, due to the collaborative efforts of the government and local organizations, Beitou’s old street area has rapidly become one of Taiwan Region’s most popular leisure destinations for hot springs, becoming the first hot spring park in Taiwan Region, and serving multiple public purposes such as municipal activities, private celebrations, and resident gatherings (Lin, 2015). Additionally, through cultural festivals and peripheral benefits, it is possible to enhance the destination image, effectively increase tourism revenue, and promote community development, while also providing opportunities for local cultural display and a platform for enhancing local cohesion, effectively showcasing the socio-cultural significance, economic benefits, and multifaceted shaping of the regional image (Raj, 2004). Recent literature on district development primarily explores the impact of the destination image on future visitor behavior, with few studies delving into the conditions of “history and culture” (Ragab et al., 2020).
In the process of service innovation and industry revitalization, collaborative innovation is a key strategy for energizing the economy and creating social opportunities. By integrating the resources, knowledge, and capabilities of the public and private sectors, collaborative innovation promotes more extensive and effective service provision (Lin & Chen, 2024; Xiong et al., 2019). This cooperation extends beyond the resources within a single organization to include information sharing, process integration, and joint efforts with partners. Julice Salvagni et al. (2020) further emphasized the importance of cluster concepts in local economic revitalization. Clusters allow interconnected businesses to act together through organizational, collaborative, and cooperative arrangements, thereby enhancing regional economic vitality and innovative capacity. Collaborative innovation emphasizes innovation as a primary driver of economic development and creates economic value through the cooperative process of developing new products or services (Kuo & Chen, 2022). Recent research directions in collaborative innovation have largely explored cooperation models between governments and businesses, such as local policy support for cultural development and enhancing tourism services through cooperation between local governments and tourism operators, using public-private innovation models to enhance competitive advantages and enrich cultural tourism experiences, becoming an essential driving force for development (Pons-Morera et al., 2018; Loulanski, 2006; Emery & Flora, 2006). However, recent studies in this area are still somewhat lacking, and scholars believe that issues such as service innovation and collaborative innovation urgently require research (Lin & Chen, 2024; Kuo & Chen, 2022; Ng et al., 2022; Ng et al., 2023).
In summary, based on the aforementioned research background and motivations, the objectives of this study are as follows, with the research findings expected to contribute to the revival of tourism and the economy post-pandemic and enhance the overall attractiveness of services and experiences in the Beitou Cultural District. The research objectives include: 1) exploring the content of service innovation; 2) analyzing how service innovation is related to customer experience; 3) exploring the implementation models of service innovation in the Beitou Cultural District.
2. Literature Review
2.1. Service Innovation in Cultural Districts
The concept of innovation was first introduced by the economist Joseph A. Schumpeter in 1932, who defined innovation as the process by which businesses effectively utilize resources to meet market needs through innovative production methods. According to Schumpeter (1934), innovation involves the recombination of market, technology, resources, and organizational elements to fulfill market demands. Tax and Stuart proposed two methods to define service innovation: one involves changes within the existing service system scope, and the other involves changes between operational processes and participants. Thus, service innovation not only enhances all existing products, services, and processes but also includes the application of technology to valuable societal and industrial elements to meet the needs of the broader market (Tax & Stuart, 1997). Hertog and Bilderbeek (1999) believe that service innovation, like other products, seldom changes the intrinsic characteristics of the product. Introducing a product unrelated to the market or service used through an entirely new distribution channel is considered service innovation. Its four fundamental aspects include: New Service Concept, New Client Interface, New Service Delivery System, and Technological Options. Moreover, countries rich in diverse cultural heritage resources attract tourists through innovative strategies, allowing them to experience profound feelings, emotions, and experiences, thereby promoting cultural appeal with core cultural products and supplementary activities. Della Corte (2009), in a management study on the application of service innovation in heritage, proposed the technological, experiential, systemic (TES) model for analysis, emphasizing the importance of technology, experience, and systems. This helps enrich visitors’ cultural experiences and enhances the attractiveness and competitiveness of local cultures, achieving the innovative effects described by Schumpeter.
Discussing service innovation with a historical and cultural background, service-dominant logic (SDL) emphasizes services, not goods, as the basis of exchange, focusing on co-creating customer value as the core. It proposes a process of value creation between customers and businesses through interaction and collaboration (Vargo & Lusch, 2004), which has been a key approach in enhancing experience-based service innovation in recent years. SDL’s core idea is to provide value-providing services, not just goods, as the basis for economic exchange. In the tourism industry, focusing on creating and delivering value is considered a process of co-creating experiences, where both tourism service providers and consumers participate, encouraging innovation and creating unique travel experiences. SDL emphasizes providing tourists with a comprehensive experience, including research on customer participation, experience design, sustainability, and technology integration, achieved by offering cultural experiences or educational tourism (Tussyadiah & Fesenmaier, 2009). In the tourism industry, involving tourists in the service creation process allows for customization to fit personalized travel routes or interactive experiences with technology integration (Hwang & Lyu, 2015). With the advancement of digital technology and techniques, there is a stronger encouragement for the tourism industry to integrate new technologies to enrich travel experiences and generate more value (Gretzel et al., 2015).
Additionally, Barile introduces a framework of systems, networks, and ecosystems, transforming the perspective of service exchange from traditional one-to-one exchange models to more dynamic, multi-faceted, and interactive processes. Service innovation involves the entire ecosystem, expanding from direct interactions between consumers and businesses to include government agencies, businesses, residents, tourists, and other stakeholders who depend on shared resources, technology, and finances. Each activity and exchange contributes to the operation and innovation of the entire system, creating greater local circular capabilities and value. The important structures include (Figure 1).
1) Systems, which provide the structure or platform for offering and receiving services, organized in an orderly and interconnected composition to achieve a common goal. The Beitou Cultural District integrates hot springs, transportation, accommodation, dining, leisure, and similar transnational comprehensive service systems, optimizing resource utilization and enhancing the overall visitor experience.
2) Networks cover the connections between different organizations and individuals, which can be formal collaborations or informal exchanges. The local organizations and individuals in Beitou form a tight collaboration network, covering their supply chain, partners, and groups that influence service delivery. This promotes service diversity and cultural richness through business cooperation, cultural exchanges, and technology sharing.
3) Ecosystems emphasize the interdependence and interaction between
Figure 1. Beyond Dyads: Systems, Networks and Ecosystems in Service Research (Barile, Lusch, Reynoso, Saviano, & Spohrer, 2016).
different individuals, organizations, and units, producing and maintaining a dynamic balance system. Participants in the ecosystem co-create diversified services and values, transcending service boundaries (Vargo & Lusch, 2008).
According to Vargo (2011), the development of cultural districts is an ecosystem composed of multiple diverse stakeholders; actors play different influential roles in creating and exchanging value, collectively promoting local development and service innovation.
2.2. Collaborative Innovation
Collaborative innovation is a significant cooperation model in which two or more organizations work together, share resources and capabilities, and seek external innovations to develop new products or services to achieve common innovation goals (Ng et al., 2023). Collaborative innovation promotes the flow, aggregation, and integration of resources within business networks by expanding organizational resources and enabling inter-organizational collaboration (Xie & Wang, 2020). This innovation is not confined to any specific region or field; it connects markets through cultural, technological, aesthetic, or broader needs, thereby generating more international business opportunities (Tsai, 2020), and creating effective local economic benefits through consumer-driven service improvements and new service creation.
Collaborative innovation emphasizes coordination and resource integration among partners, jointly bearing risks and benefits, and creating synergistic advantages through inter-organizational cooperation (Kanter, 1994). This form of innovation involves collaboration among different organizations, such as governments, private enterprises, and non-profit organizations, to jointly develop new products or services and share resources. Collaborative service innovation combines interdependence and mutual needs, offering solutions that meet the demands of multi-party collaborations, thus realizing the benefits and value of innovation. The key elements include (Figure 2).
1) Diverse Cooperation: Collaborative innovation requires cooperation between organizations from different fields and expertise to ensure a broad and diverse perspective and resource sharing. Effective collaboration and shared distribution relationships based on common goals are critical to achieving collaborative innovation (Lasker, Weiss, & Miller, 2001). Collaboration needs to be built on trust, respect, and effective communication, where efficiency and the judicious use of resources are key factors for success.
2) Resource Sharing: Collaboration involves cooperation between organizations from different fields and expertise to ensure a wide perspective and resources are linked to their service content. Collaborative innovation emphasizes the efficient use of partners’ and customers’ expertise and resources, acquiring, absorbing, and utilizing external knowledge to gain competitive advantages (Papadopoulos & Martínez-García, 2019).
3) Strategic Formulation: Successful collaborative innovation requires clear
Figure 2. Key elements and steps for promoting collaborative innovation.
collaborative goals linked to service-related benefits (Brouder et al., 2015).
4) Effective Communication: Ensuring effective communication and coordination mechanisms among all partners, as well as their roles and positioning in collaborative innovation, is key to successful implementation (Lawson et al., 2009). Knowledge sharing and participant development outcomes in collaborative organizations illustrate the contributions of effective communication, encouraging service organizations to establish bi-directional social connections with participants. This helps increase knowledge flow, improve product development outcomes, and enhance economic benefits.
5) Shared Value: Sharing knowledge in the innovation process is a key factor influencing innovation in industrial clusters. Ensuring that innovation results are fairly distributed and regularly evaluated for benefits is crucial to securing the outcomes of collaborative innovation (Hjalager, 2010). Ensuring that collaborative organizations and participants benefit from the innovation process encourages their continued involvement.
In summary, the application of collaborative service innovation requires clear multi-party cooperation, resource sharing, strategic formulation, effective communication, and value sharing. These five elements together promote the success of collaborative innovation, encompassing system collaboration and network resource sharing, as well as ecosystem demand strategies and communication-achieved shared values.
3. Methodology
3.1. Case Study Method
In this study, we have chosen to employ a qualitative case study method to deeply explore the service innovation model of the Beitou Cultural District. According to Creswell (1999), the qualitative case study approach enables a comprehensive understanding of a case’s context by collecting data in-depth from multiple sources over a period of time. Moreover, Yin (1994/2009) points out that qualitative research methods are particularly appropriate when the research questions involve exploring ‘how’ and ‘why’. This aligns well with the purpose of our study—to analyze how the Beitou Cultural District achieves service innovation and enhances customer experiences. The specific reasons for choosing a single case study approach include:
1) Deeper insights: The service innovation in the Beitou Cultural District involves multi-party collaboration and cross-regional cooperation, which are core factors affecting the effectiveness of innovation. By collecting and analyzing data deeply from a single case, including direct participation and observation, one can reveal the underlying factors that influence the innovation process (Yin, 1994).
2) Exploratory and explanatory needs: This research is committed to a detailed depiction of the specific practices of service innovation in the Beitou Cultural District and their relationship with customer experiences. This involves not only describing phenomena but also explaining the underlying mechanisms and dynamics, thereby transcending the superficial analysis provided by purely quantitative research (Yin, 2014).
3) Detailed study of the process: The case study method allows researchers to focus resources on exploring the unique phenomena within key cases. This approach aids in understanding the evolution process and outcomes of service innovation in a specific context over time, providing an in-depth examination of the details.
3.2. Case Selection Criteria
The choice of Beitou Cultural District as the research subject holds multiple layers of value and significance, which can be specifically elucidated through the following measurement criteria:
1) Cultural and historical value: Beitou Cultural District possesses rich cultural heritage and historical background. Its hot spring culture not only attracts and provides visitors with quality experiences but also serves as a pivotal site for studying the development of Taiwan Region’s hot spring culture. Its depth of culture and history provides abundant data and unique perspectives for research.
2) Experience of transformation and development: The transformation and development process of Beitou Cultural District serves as a model for regional revitalization, showcasing how innovation and collaboration can enhance the area’s commercial value and stimulate economic growth. This process encompasses the transition from traditional tourism to modern leisure and cultural experiences, offering a high-value case study for researching local development.
3) Validation of social and cultural continuity: The development of Beitou Cultural District not only fosters commercial activities but also strengthens cultural education, sustainable development, and the preservation of historic sites, aiming to establish and pass on shared memories. This aspect holds significant importance (Pine & Gilmore, 2011).
4) Appeal for Innovative Experiences: Beitou Cultural District successfully attracts visitors and enhances their intention to revisit by providing innovative tourism experiences. The design and implementation of innovative experiences are crucial for understanding how economic cycles and sustainable value can be created through service experiences (Zhang et al., 2018).
3.3. Data Collection and Analysis
The research employed triangulation to enhance the reliability and validity of the results, ensuring that data were examined from multiple perspectives to increase the overall credibility of the study. Following the guidelines by Denzin (2009), the study integrated data from various sources, including public government reports, academic articles, official statistical data, and relevant news reports, which are considered significant secondary sources.
During the data collection process, from January 2021 to December 2023, we extensively gathered relevant secondary data. This included records from over 50 local service experience events, various policy documents and promotional materials, and other forms of publicly available information. These sources were not only timely but also directly related to the research questions, thereby enriching the breadth and depth of the analysis. Data from government and reputable academic institutions were primarily targeted to ensure the authority and reliability of the information obtained.
Furthermore, through participatory observation and cross-validation methods, the validity and consistency of the data were confirmed. The study utilized a comprehensive analytical approach to fully understand the service innovations in Beitou Cultural District, and it also demonstrated the impact of these innovations on the regional economy and social values. A thorough and in-depth perspective was used to explore the service innovation model of the Beitou Cultural District, evaluating how these innovations have shaped the local cultural and social-ecological structure.
4. Case Introduction and Description
The Beitou Cultural District is located in the Beitou District of Taipei City. During the Japanese colonial period, Beitou hot springs were highly valued by the Japanese, who began systematic development. In 1916, to attract more tourists, the Japanese built a new station in Beitou, initially called “New Beitou Boarding Place,” later renamed “New Beitou Station” (Taipei City Department of Cultural Affairs, 2017). The development during this period made the Beitou hot springs one of the most famous hot spring areas in Taiwan Region. Over time, Beitou’s culture and history have become deeply embedded in the local architecture, legends, and daily life. From ancient Filial Piety Arches and historic temples to residential buildings left from the Japanese colonial period, every corner tells the rich historical stories of Beitou.
Beitou is renowned not only for its hot springs but also for its rich historical buildings and cultural sites. These locations are not just popular tourist attractions but also vital places for understanding Taiwan Region’s history and culture. The main streets of the Beitou Cultural District include Zhongshan Road, Guangming Road, Xinmin Road, and Quanyuan Road, areas surrounding the Beitou Hot Springs Park and its vicinity, which also define the geographical scope of this study’s exploration of the Beitou district.
The Beitou Cultural District, leveraging its rich hot spring resources and traditional culture, has evolved into a tourism destination that integrates leisure, health, and cultural experiences. Through collaboration with government agencies and private enterprises, the quality of hot spring service experiences has been enhanced, and the district actively combines and promotes diverse tourism destinations for cultural learning and ecological exploration. The Beitou Cultural District hosts several significant historical sites and cultural events, notably including the Hot Spring Museum, Beitou Plum Garden, Marshal Zen Garden, and the century-old Colliding Sedan Chair Prayer Festival.
The Japanese-style wooden residential building “Beitou Plum Garden” was once the summer villa of Yu Youren, a renowned calligrapher, built in the late 1930s with cypress wood, featuring grey roof tiles, stone bases, and a basement made of reinforced concrete as an air-raid shelter, leaving a historical mark on the architectural development of the wartime era, and is designated as a city historical building by the Taipei City Government. In 2023, the Beitou Colliding Sedan Chair Prayer Festival featured four teams from Matsuyama City’s Dogo Hachimachi, including “Dogo Village’s Grand Mikoshi Association,” “Little Chinaman’s Grand Mikoshi,” and “North Little Chinaman’s Grand Mikoshi United Association,” with over 300 carriers performing traditional sedan chair collisions in front of the New Beitou MRT station (Figure 3).
Figure 3. The century-old colliding sedan chair prayer festival in the Beitou Area.
5. Research Findings and Discussion
5.1. Service Innovation in Beitou Cultural District
This study applies the TES framework (Della Corte, 2009) to analyze the content of service innovation in Beitou hot springs street, key excerpts are as follows (Figure 4).
1) Technological innovation: Enhancing visitor experiences through technologies such as the internet, enriching their historical and cultural understanding,
2) Richness of experience: Integrating Beitou’s unique hot spring culture with traditional Japanese cultural experiences, creating and introducing unique experiences or those connected with similar thought processes or cultural sentiments.
3) System integration: Encouraging and promoting policy support for urban and industry collaboration, integrating related or connectable areas, services, and diverse industries, such as Beitou hot springs, historical sites, and ecology, to co-create innovative tourism services with new experiences.
Examples of service innovation in Beitou Cultural District include the following: In terms of technology application, the 2022 Beitou Witch Magic Festival introduced AR blessings by witches and VR secret realm decryption games, while the 2021 Taipei Hot Springs Season used AR experience for point collection and raffle draws. Regarding the experiential aspect, the annual “Beitou Flower Yukata Festival” connects with Japanese yukata culture, integrating the tradition of attending festivals and firework displays, or as summer outdoor attire into the hot springs experience. Participants experience the attire worn by nobles during the Heian period while bathing, integrating Japanese culture with the history of Beitou hot springs into the festivities. This presents a cross-cultural model with historical connections, effectively attracting the attention and focus of tourists and participants.
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Figure 4. The different forms of innovation in cultural offers (Valentina D. C., Iris S., Alessandra S., 2009).
In summary, service innovation in the Beitou Cultural District has progressively developed and advanced, particularly in combining local features with technological innovations. Initially, Beitou’s tourism services emphasized health and healing wellness models, which were highly favored by tourists. With technological advancements, tourism services began to integrate digital elements. To provide a more diversified cultural experience, besides combining traditional and modern innovative strategies, efforts are also made actively to explore the integration of cross-cultural exchanges, natural ecology, and new travel methods. This study finds that Beitou’s tourism service innovation demonstrates a complementary relationship between technology, experience, and service. Technology not only leads this transformation but also supports providing more comprehensive and in-depth experiences. Through effective system support, tourist participation is enhanced, thereby highlighting the value of services. This not only strengthens the momentum for local service innovation but also becomes a key factor in enhancing the overall tourist experience. In other words, by incorporating cultural, historical, and hot spring features, introducing experience and technology, and coordinating with systems and policies, the range of services is expanded, creating experience-based service innovation.
5.2. Experience-Based Service Innovation
According to research data, the Beitou area continues to promote experience innovation in the tourism industry to attract more visitors and enhance the competitiveness of the local tourism sector. Through events such as the “Century-old Palanquin Collision Blessing Festival” and “Yukata Festival” (Taipei Hot Springs Association, 2023), Beitou successfully integrates the local culture in Taiwan Region with traditional Japanese images, creating new experience-based service innovations. These events not only enrich local cultural activities but also enhance the attractiveness of the Beitou Cultural District, fostering cultural exchanges and the development of the local economy (Taipei City Office of Commerce, 2023). The events include street parades featuring Japanese taiko drum teams, Mito City warriors, Hanagasa dance, and Yudan fox performances, displaying the amalgamation of religious cultures from the Taiwan region and Japan. Additionally, a custom-made “Matsuyama Dogo Hot Springs Blessing Clock” allows participants to experience Japanese local culture up close and feel the vibrant local characteristics.
The 2023 Taipei Hot Springs Season was the first major event held post-pandemic, themed “Dogo Palanquin Collision, Beitou Blessing Festival, Hot Spring Banquet Fun.” Service innovation incorporated Japanese cultural elements into the event, introducing the palanquin collision blessing ceremony and the Japanese tradition of strolling in yukatas. After a four-year hiatus, the event invited the Dogo Shrine palanquin from Matsuyama, Japan, for the third time to participate in a procession along with local Beitou palanquins for blessings (Liu, 2023). This enhanced the cultural relevance and novelty of regional activities, creating new experiential impacts and service models. The application of technology also integrated the government’s strong promotion of digital mobile payment technologies, providing various discounts to stimulate consumption and generating diverse and rich innovative experiences through virtual and augmented reality technologies (Huang, 2023).
At the “Century-old Palanquin Collision Blessing Festival,” Taipei City specially introduced the traditional “Palanquin Collision Ritual” from Matsuyama City, Japan. It is a unique ceremony within the Shinto festival in Matsuyama, where portable shrines are carried across the community, worshiping the shrine and bringing good fortune to local businesses and families. During the event, the shrines collide, and participants vigorously shake the palanquins to entertain the deities. This practice, known as the “Palanquin Collision Ritual,” symbolizes prayers for bountiful harvests and booming business (Zhu, 2019). The event integrated Japanese culture into Beitou’s hot spring culture, offering experiences of soaking in Japanese-style hot springs, tasting cuisine, and participating in various performances, akin to returning to Beitou a century ago or being in Japan. These innovative service methods not only make Beitou a platform for cultural exchange but also further enhance the local tourism appeal and bring economic benefits to the area (Sun, 2023). Through cross-cultural fusion activities, Beitou successfully showcases the uniqueness and charm of the local culture, also creating new tourism experiences and service innovation paradigms.
The concept of cross-cultural innovation encompasses the process of “experience innovation,” which integrates diverse cultural elements and creative thinking into products or services, thus creating unique experiences and enhancing product value. In exploring this concept, the relationship and mutual influence between Japanese hot spring culture and Beitou hot springs in Taiwan Region become apparent. Locations like the Beitou Hot Springs Museum display the rich hot spring history and cultural heritage of the area. The architectural style of Beitou’s hot springs blends Japanese and Western elements, reflecting the cultural integration of the time (Charette, 2022).
Through the axioms of service-dominant logic, cross-cultural innovation not only changes the products or services themselves but also alters how people perceive and experience these products. In the case of the Taipei Beitou Hot Springs Season, it pioneered new tourism experience innovation services. The process of cultural integration involves deconstructing existing product categories, exploring historical and cultural innovations, changing conventional thinking, and embodying cultural values through strong symbols (Li, Wu, & Xiong, 2021). Cross-cultural innovation not only transforms the products or services themselves but also, by integrating hot spring cultures from the Taiwan region with Japanese image, Beitou brings forth local cross-cultural experiential services, becoming a symbol of culture and refinement. The development and innovation process in the Beitou hot springs area, through deconstructing existing product categories, exploring historical and cultural innovations, changing established thinking, and symbolizing cultural values, creates new values and experiential services (Michela, 2020).
The success of the process lies in the deep understanding and integration of different cultural characteristics, transforming mere tourism into a comprehensive cultural experience and providing consumers with unique and rich “experience-based service innovations.” Analyzing from the perspective of customer experience-based “experience-based service innovation” reveals that service innovation covers (Figure 5).
Figure 5. “Experience-based service innovation” grounded in customer experience.
1) Service innovation in healing and health experience: The 2021 Beitou Hot Springs Season, themed “Gathering Energy in Beitou, Bathing for a Bountiful Year,” emphasized healing and health consciousness, integrating Beitou’s hot spring resources to offer a dual healing experience. This experience innovation reflects contemporary tourists’ demand for health and mental peace, where therapeutic tourism seeks a holistic well-being experience.
2) Service innovation in cultural and historical experience: Beitou not only preserves traditional cultural elements but also incorporates elements from different cultures sharing historical contexts, such as the introduction of Japanese cultural elements in the 2023 events. This cultural integration enhances the diversity of tourist experiences, facilitates cross-cultural exchanges, and is one of the crucial factors in tourism experiences that attract visitors from various cultural backgrounds to embrace new experiences.
3) Service innovation in technological and virtual experience: The 2021 event included augmented reality experiences, while the 2023 event leveraged technology to promote digital mobile payment and virtual and augmented reality technologies. Technological innovation can enhance tourist interaction, increase participation and satisfaction, and make events more appealing.
4) Service innovation in systematic continuation of experience: Events in Beitou not only focus on single experiences but also combine different elements into a system, such as integrating hot spring bathing with tea tasting. This systematic innovation provides a more comprehensive tourism experience and encourages tourists to participate in various activities, achieving tourist loyalty and satisfaction through systemic innovation.
Experience-based service innovation, adapted to meet different tourist expectations, trendy demands, and thematic experiences, helps enhance the attractiveness and value of the locality. Analysis of research data reveals the importance of placing tourists at the center of the experience innovation process, as proposed in the experiential competition space by Prahalad and Ramaswamy (Figure 6), capable of creating unique, personalized, and evolving experiences. The fusion of Beitou and Japanese cultures not only preserves traditions but also represents an innovative expression, illustrating how the combination of similar yet distinct cultural backgrounds can expand the spatial and temporal axes of experiences. By integrating various resources and networks, solutions are created to meet the diversified needs of tourists.
Figure 6. The New Competitive Space for Innovation (Prahalad & Ramaswamy, 2003).
Moreover, the transformation from mere spaces to experiential spaces into more comprehensive experience solutions and trans-temporal innovative experience spaces. The Beitou Cultural District utilizes the concept of the experiential competitive space proposed by Prahalad and Ramaswamy, integrating products, solutions, and experiential spaces, cross-cultural fusion, and emphasizing co-creation with customer participation, evolving customer experiences to achieve a competitive advantage in innovative experiences. It is noteworthy that the relationship between innovative experiences and their competitive space lies in the unique value proposition they provide, creating service differentiation in the market, effectively attracting more participants, and enhancing the locality’s competitiveness.
5.3. Collaborative Service Innovation Development Model in
Cultural Districts
This study identifies intersections and connections among technology, systems, and experience within the service innovation projects of cultural districts (Figure 7). Specifically, in cases like the Beitou Hot Springs Festival, the intersection between technology and experience has formed “Technology-Enhanced Experiences,” which integrate and enhance tourism attractions. The link between technology and systems has created an intersection area of “Local Policies,” driving cultural exchanges and community development. The overlap between systems and experience has led to “Cross-domain Service Integration,” enhancing service efficiency and quality and providing tourists with diverse, highly personalized, and culturally rich travel experiences. Simultaneously, these core elements influence and relate to each other, forming a collaborative service innovation model. This effectively enhances local characteristics, creates competitive local tourism, and drives local economic development, bringing long-term benefits to the community.
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Figure 7. Collaborative Service Innovation: A New Model for Cultural District Development.
5.3.1. Technology-Enhanced Experiences
Through the case of the Beitou Hot Spring Festival, technology, science, and scientific methods have been integrated into past experiences to enhance the overall presentation of the tourism experience. The area has introduced modern technological interactions and popular trends, strengthening the service system’s integration from a technological perspective. This includes various services such as shopping, cultural tours, maps, and electronic payments, effectively promoting consumption in the Beitou hot spring area (Chen, 2023; Huang, 2023). Additionally, incorporating trendy elements like NFTs or immersive participatory activities based on Beitou’s existing culture has created a fusion of culture, historical connections, and technology across time (Liu, 2023; Charette, 2022). Events such as the Yukata Festival, Cultural Festival, Magic Festival, and Hot Spring Season have further influenced and altered traditional experiences, enhancing the area’s attractiveness and promoting cultural and economic development (Taipei Hot Springs Association, 2023; Taipei City Office of Commerce, 2023). However, the threshold and universality of technology must align with consumers’ actual application and experience needs to showcase the value of its technological significance. Key considerations when discussing and expanding the concept of technology-enhanced experiences include (Figure 8).
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Figure 8. Technology-enhanced experience factors.
1) Novelty and freshness: Technology plays a crucial role in creating novel and fresh experiences for visitors. Innovative technologies such as virtual, augmented, and mixed reality can immerse visitors in new and exciting environments. The novelty evoked by technology enhances the experiential impact.
2) Popularity influence trend: The popularity of technology-enhanced experiences can influence tourist preferences. Trends in technology adoption, using specific mobile apps or wearable device hardware, drive visitors to seek destinations and activities that incorporate these technologies, meeting modern expectations and creating intersections between technology and experience.
3) Technological threshold: A critical point in assessing the feasibility of technological experiences. This includes evaluating and integrating the technical requirements, infrastructure, and costs associated with technology. Finding a balance between feasibility and innovation ensures that these experiences are practical and hold sustainable value.
4) Personalized experience integration: Technology allows for highly personalized experiences. Visitors can tailor their journeys enhanced by technology by choosing options that align with their interests. From selective interactive tours and simulation stories to triggered events like movement lines and activities, technology applications cater to individual preferences and engage tourists’ interests.
5.3.2. The Promotion of Local Policies
Since 2019, the Beitou Cultural Festival has introduced the traditional Japanese “mikoshi” ceremony, which shares a similar cultural background, marking the first time that cross-regional and cross-national cultures have been integrated into the cultural experience (Zhu, 2019). By 2023, this ceremonial element was further incorporated into culturally innovative activities, showcasing elements related to cultural history, such as blessings, harvests, and prosperity. These elements, celebrated through festivals, have effectively boosted the local economy (Liu, 2023; Sun, 2023; Taipei City Office of Commerce, 2023). Moreover, the cooperation between Beitou and the Nanchang business district, facilitated by local policy integration, has connected the distinct local features of both areas, meeting diverse tourism needs and experiences and achieving a win-win situation for community needs and policy goals. The advantages of cross-domain services have further promoted policy initiatives, community cooperation, and participant support, creating multifaceted value and pushing service innovation towards a service ecosystem. In the process of implementing local policies, ensuring that policies align with the needs of multiple stakeholders and promote sustainable development is a key consideration, as this will directly impact regional development. After analysis, the following factors should be considered when formulating policies (Figure 9).
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Figure 9. Key factors to consider when promoting local policies.
1) Impact of time, location, and distance: Local policies need to address practical issues in tourism, including travel time, distances between attractions, and accessibility. Policies should ensure that visitors have ample time to explore the cooperative business districts and address potential challenges related to transportation or distance.
2) Connectivity of culture and needs: Local policies can promote the connectivity of culture and needs between different tourist destinations. This includes fostering cultural exchanges and organizing festivals or events to showcase the unique characteristics of each area. For instance, in the Beitou Yukata Festival, activities between the two business districts and brand alliances under cooperative scenarios can encourage the sharing of cultural elements between districts to attract more visitors and provide richer experiences.
3) Genuine needs of tourists: Local policies should be based on a deep understanding of tourists’ real needs, which can also be gathered from tourist surveys and observing their behavior. Analyzing tourist preferences for cooperative business districts and their associations can serve as a basis for adjusting policies and services to meet the true needs of travelers.
4) Collaboration and innovation: Local policies can connect and encourage collaboration among local governments, associations, businesses, and service providers, bringing about innovative and effective linkage solutions. This collaboration can enhance the overall tourism experience and attract a broader group of tourists. Through the integration of the aforementioned factors, effective cooperative service innovation concepts can be generated.
5.3.3. Cross-Domain Service Integration
Integration highlights the unifying role of technology in systems aimed at enhancing service efficiency and quality while improving visitor experiences. This integration encompasses various digital technologies, the continuation of traditional skills, and service provision, making the tourism process more familiar and convenient. Integrated services involve collaboration and consensus with local communities and governments to ensure that technological applications meet practical needs and enhance the experience. Key considerations for guiding participant willingness include (Figure 10).
1) Integration of technology and business activities: Integrated services involve seamlessly incorporating technology into business activities to increase efficiency and provide more attractive tourism services. This may include technology applications in booking, payment, itinerary planning, and customer interaction, such as using mobile apps or websites for ticketing, restaurant reservations, or obtaining real-time travel advice during the hot spring season.
2) Community participation and collaboration: Integrated services require collaboration among all parties, helping to ensure that tourism experiences align with local community needs and culture while providing innovative technological solutions to create more appealing travel experiences. Beitou offers deep
Figure 10. Key factors of cross-domain service integration.
insights into local culture and attractions to create more compelling tourism experiences.
3) Involvement and support of government agencies: Integrated services need support from government agencies, promoting technological innovation through policies while ensuring legality, reliability, and security to protect tourist rights.
4) Providing a more comprehensive service experience: The goal of integration is to provide a more comprehensive service experience, making the tourist’s journey more seamless and convenient, including integrating various types of technology.
5) Collaborative services: Emphasize the cooperative relationships among multiple stakeholders to offer a superior tourism service experience through integration. This helps enhance tourist satisfaction and promotes tourism and economic development, ensuring smoothness in the service experience.
During the 2023 Taipei Hot Spring Season, various electronic payment methods were provided, making payment more convenient and aligning with the technology payment habits of the mobile generation, effectively driving consumption in the Beitou hot spring area (Chen, 2023). This also helps improve tourist satisfaction and provides a higher level of service. Integrated services emphasize collaboration among technology, business activities, community participation, and government agencies to offer a superior tourism service experience through integration. Besides enhancing tourist satisfaction, it also promotes the development of the tourism industry and ensures tourists enjoy a smooth experience during their travels.
Furthermore, the intersections of technology-enhanced experiences, local policy initiatives, and cross-domain service integration highlight how cultural districts consider customer experience in developing local characteristics and service innovation. Through collaborative service innovation, existing service models are transcended, expanding into sustainable development ecosystems. Drawing from Barile et al.’s framework on systems, networks, and ecosystems, and Du Gay et al. (1997)’s concept of the circuit of culture, both propose a continuous interaction and influence of multiple elements that change the regional service experience and service innovation. The circuit of culture underscores the interconnectivity through production, consumption, regulation, representation, and identity, yet production and consumption are just two aspects within this cultural cycle (Johnson, 1986). In the case study of the Beitou Hot Springs season, the activities included planning and promotional preparations (production). These activities are experienced by tourists through participation, enjoying hot springs, receiving culture, and consuming local goods and services (consumption). Local policy plays a regulatory role by establishing event policies and regulations to protect local culture and the environment (regulation). The technological experience includes various technological applications, such as the hot spring season’s online booking system and interactive cultural activities (representation). Efforts from different service providers and local communities provide a diverse regional experience, achieving integrated services to meet tourist needs (identity).
This study, originating from the perspective of collaborative service innovation and through the domains of technology-enhanced experiences, local policy promotion, and cross-domain service integration in the Beitou Cultural District, aims to expand research approaches within cultural districts.
6. Conclusion and Recommendations
6.1. Conclusion
The Beitou district, by integrating local culture, history, and modern technology, has successfully created a unique district-wide experience-based service innovation. Recent events centered around hot spring festivals, historical heritage tours, and local food exhibitions have not only enhanced the visitor experience but also promoted local economic development. The key to this successful service innovation model lies in collaborative innovation, incorporating joint efforts from local governments, private enterprises, and community groups; this study further proposes a collaborative service innovation development model.
Service innovation in the Beitou district includes not only the sharing of physical infrastructure but also the establishment of social infrastructure, which fosters local community participation and collaboration among stakeholders. Through the collaboration of multiple organizations and the implementation of clustering concepts, resource sharing, knowledge exchange, and close cooperation among partners are promoted; this not only enhances the experience but also provides robust support for the sustainable development of the local economy and the creation of social opportunities.
Furthermore, collaborative service innovation plays a crucial role in the post-pandemic recovery and market rebuilding of the area. In the process of constructing services through collaborative innovation, the five key elements for driving successful collaborative service innovation include diverse organizational cooperation, resource sharing between industry and government, the formulation of co-prosperity strategies, effective communication among parties, and the sharing of values. This not only promotes rapid regional recovery, bringing new vitality to the local economy, but also drives the development of the service ecosystem.
6.2. Industry Implications
This study explores service innovation in the Beitou district and develops a “collaborative service innovation” as the core model for cultural district development through the TES analytical framework. By enhancing technological experiences, promoting local policies for cultural exchange and community development, and improving integrated services, this model provides a rich, highly personalized, and culturally distinctive co-creation model for regional development. The collaborative innovation model not only highlights the region’s competitiveness as a tourism destination, enhancing visitor experiences, but also drives local economic development, bringing more sustainable benefits to the area. The practical implications of service innovation for the three main stakeholders are as follows:
1) Local governments: Local governments play a significant role in promoting cultural innovation and economic development. It is recommended that local governments utilize the findings of this study to formulate more effective cultural and economic policies, from participation to expanding regional potential. Additionally, the direction of local government policies and investments influences the actions and development of businesses, organizations, and community members.
2) Businesses and organizations: For businesses and organizations investing in tourism, hotel services, local historical departments, and enterprises providing experiences, it is clear how collaborative innovation and technology applications can enhance tourist experiences and competitiveness. Their actions are influenced by local government policies and, in turn, affect community participation and identification.
3) Community members: Empirical community participation is crucial for the revitalization and economic development of cultural districts. Active participation and support from community members contribute to the sustained development of the area. Their involvement is influenced by the quality of services and experiences provided by businesses and organizations, and also guided by local government policies.
The single case study in this article may limit the generalizability of findings across different cultural districts. In addition, the participatory observation method may introduce researcher bias, which could affect the interpretation of findings. It is recommended that future discussions specifically address the interactions between local governments, businesses, organizations, and community members, and strengthen collaborative cooperation among them. Local governments can promote high-quality service experiences provided by businesses and organizations through policy-making and support, while also encouraging participation and support from community members. Businesses and organizations should adapt to local government policy directions, provide services that meet regional needs, and actively interact and cooperate with community members. Community members can promote regional development and prosperity through active participation and support.