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Indonesia’s development target is the achievement of people’s welfare. One way to accomplish these objectives is to increase people’s income through the development of MSMEs (Micro, Small, and Medium Enterprises). Strong competitive MSMEs are expected to encourage sustainable business. Why MSMEs? MSMEs is a business field that has a major contribution in the absorption of manpower. The government provides ease of doing business for all business actors. For the owners of MSMEs, through empowerment by the government, it is expected to increase the business class, from a micro business to small business, from small business to medium business, and from medium business to large business. Currently, the importance of the success of MSMEs empowerment is of high priority. For this reason, the policy of central government and regional government is very important for MSMEs. In addition, increased knowledge and skills, funding, market networking, and others will be a strong driver of growth and development of MSMEs. Hence, the growth of MSMEs requires the participation of several parties, such as government, universities, banking sector, community, media, and the owners of MSMEs. Involvement of MSMEs empowerment is a form of social innovation that builds the strength of MSMEs in sustainability. This article will present how the policies and strategies of regional governments in Indonesia, particularly the Government of East Java Province and PT. Bank Pembangunan Daerah Jawa Timur Tbk (Regional Development Bank of East Java Province), are encouraging high economic growth so as to achieve good results as well as development indicators by reducing poverty and unemployment through the empowerment of MSMEs.     Keywords: strategy, Government of East Java Province, PT. Bank Pembangunan Daerah Jawa Timur Tbk, Welfare, MSMEs (Micro, Small, Medium Enterprises)

kne social sciences

The Role of Regional Government Policy and PT. Bank Pembangunan Daerah Jawa Timur’s Strategy to Encourage the Development of MSMEs Through Social Innovation