Green Innovation as a Strategy for Strengthening the Competitiveness of Micro, Small, and Medium Enterprises

Abstract

Micro, small, and medium enterprises (MSMEs) anchor much of the national economy, yet many still compete on a narrow base of resources, technology, and conventional market thinking. As environmental expectations tighten, green innovation—rethinking products, production processes, and business models around ecological responsibility—has emerged as an alternative source of advantage. Drawing on scholarly publications from the last five years, this paper conceptually examines how green innovation can function as a competitiveness strategy for MSMEs. The review suggests that green product, process, and management innovation together lower operating costs, differentiate offerings, widen market reach, and build business reputation. Adoption nonetheless remains constrained by limited capital, weak green-technology literacy, and thin policy support. The paper concludes that a coordinated effort among MSME actors, financial institutions, universities, and government is needed to sustain MSMEs' green transformation.