This study aims to understand community empowerment by utilizing open innovation through Village-Owned Enterprises (VOE) to enhance sustainable public welfare. To achieve both economic and social missions, VOE must develop the ability to engage in open innovation by leveraging external knowledge sources, both inbound and outbound. This research employs a literature review method, analyzing previous studies indexed in the Scopus Database and processed using the VOSviewer software. The findings indicate that open innovation, which utilizes inbound external knowledge sources such as markets, knowledge, open resources, and cooperative networks, has already been adopted. However, the utilization of knowledge has not yet been fully optimized as a foundation for producing goods and services due to limitations in human resources. Similarly, outbound open innovation derived from technology has been implemented, although the utilization of patents remains suboptimal. This study recommends that village-owned business entities evaluate their operations, particularly in the utilization of knowledge and commercialization to ensure sustainability. Furthermore, this research contributes to the discussion on open innovation by emphasizing that leveraging market-driven knowledge, openness, cooperation, and technology should be a major focus for VOE in the context of business activities, where increased public participation plays a crucial role in sustainable economic development. © 2025 by the authors.