Direct use of geothermal energy as a source of sustainable competitive advantage for MSMEs

Geothermal energy is a renewable resource that can drive green industrial growth and holds significant potential to enhance the competitiveness of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. This study aims to determine which MSME sectors can potentially utilize geothermal energy directly to strengthen their long-term competitiveness. Using the Value, Rarity, Imitability, and Organization (VRIO) framework within the Resource-Based View (RBV), this research adopts a qualitative case study approach in Garut Regency. Data were obtained through 1) field observations of factories (leather tanning, dodol, vetiver oil, and batik), and 2) semi-structured interviews and expert assessment involving 17 participants representing MSME owners, government agencies, academics, and a geothermal energy company. The findings indicate that MSMEs in the leather tanning, dodol production, and vetiver oil sectors demonstrate relatively higher potential for competitive advantage and innovation capability compared to those in the batik sector. These advantages stem from valuable and unique local resources and more established organizational supports. However, limitations of support from the government and association, and the risk of product imitation by other regions, remain key challenges. Overall, the study provides empirical insights into the perceived link between geothermal utilization and MSME competitiveness, offering strategic implications for policymakers to strengthen organizational capacity and promote sustainable energy adoption.