Vol. 17 No. 4(I) (2025)

This study explores how social innovation drives sustainable value creation within communitybased social enterprises in Indonesia. This study employs a qualitative research design, drawing on five indepth interviews with social enterprise leaders operating across renewable energy, digital education, waste recycling, microfinance, and community health sectors. The findings reveal that social innovation is shaped by a paradoxical interaction between constraints and enablers: while limited access to finance, regulatory ambiguity, and organizational fatigue hinder scalability, community trust, cross-sector collaboration, digital transformation, and learning orientation act as powerful countervailing forces. The study develops an integrative framework that links resource-based, institutional, and dynamic capability perspectives to explain how social enterprises convert social purpose into sustainable performance. It concludes that in resourceconstrained environments, innovation flourishes not despite adversity but because of it when communities reconfigure scarcity into opportunity. The paper contributes to management theory by conceptualizing social innovation as an ecosystemic capability that fuses moral purpose, entrepreneurial logic, and adaptive learning, offering both theoretical and policy implications for strengthening social enterprise ecosystems in developing economies.