Digital Heritage Ecosphere: Empowering local-wisdom MSMEs for sustainable competitive advantage

This study aims to analyze the role of Digital Heritage Branding in enhancing the competitive advantage of local wisdom-based Micro, Small, and Medium Enterprises (MSMEs) in Riau Province, considering the mediating influence of brand authenticity and green innovation, as well as the moderating effects of government support and technological readiness. The approach employed is quantitative, utilizing the Structural Equation Modeling-Partial Least Squares (SEM-PLS) analysis method via SmartPLS 4.0 software. The study population consisted of 1872 officially registered featured MSMEs, and 400 samples were purposively selected based on specific criteria, including business age, Malay cultural background, and minimal digital adoption. The results showed that Digital Heritage Branding has a positive and significant effect on competitive advantage, both directly and indirectly through the mediation of brand authenticity. In contrast, green innovation did not prove to be an important mediator, despite being driven by digitalization. The government support variable significantly strengthens the relationship between Digital Heritage Branding and green innovation, while technological readiness does not show a meaningful moderating effect on competitive advantage. These findings support the Resource-Based View (RBV) theory and extend it through the concept of Competitive Cultural Resilience (CCR), emphasizing the importance of strengthening local cultural assets through structured and contextual digitization. This research offers strategic implications for developing a sustainable, identity-based competitive advantage in the digital era.