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This study aimed to know the obstacles and the government policy in developing the social capital of small industry in facing competition in ASEAN Economy Community (AEC) period. Using quantitative and qualitative as the methodology, this study obtained the data through interview and focus group discussion. The result showed that the development of social capital that not maximum enough was becoming the obstacle for small industry. The connection between the businessman association with other party, such as big industry, civil society organization, banking and other stake holders should be expanded. Meanwhile the government had done some policy in developing the social capital of small industry by holding a training and competition, increasing the access and relation of small industry with foreign and national company, also helping on the social capital. Therefore, small industry still can survive in facing the AEC era.

Government policy in developing social capital of small industry in facing ASEAN Economy Community era