The Islamic economy: untapped opportunity for entrepreneurs?
The second edition of the Global Islamic Economy Summit was an opportunity for stakeholders to collaborate and progress the Islamic economy, which is growing faster than ever before.
The summit, held in Dubai on October 5-6, showed that many sectors of the Islamic economy are still local.
“Halal food manufacturers focus primarily on their local market or on adjacent countries,” said Adil Mustapha, acting head of Islamic Finance at Thomson Reuters. “They are not able to expand their market for several reasons, mainly because of the lack of synergy between the different sectors.”
Thomson Reuters is one of the main organizers the Dubai Islamic Economy Development Centre and the Dubai Chamber.
The summit brought together more than 60 speakers, who discussed the various sectors that constitute the pillars of Islamic economy: Islamic finance, conservative fashion, Islamic art, family tourism and the digital Islamic economy. Representatives from more than 90 countries were present in the panel discussions.
Adil was keen to emphasize the fact that tradition-bound Muslim customers who value their culture and religious customs, were the main drivers of Islamic economy, especially because most live in fast-paced growing markets.
“The GDP of Islamic countries is growing at a 5 percent rate, compared to global GDPs that range from 3 percent to 3.5 percent,” Adil said.
Innovation 4 Impact
“Driving innovation, unlocking potential” was this year’s motto for the summit.
After launching the Islamic Economy award, which honors achievements in eight categories of the Islamic economy, the Innovation 4 Impact award was developed to support Islamic businesses in the digital economy. This year’s winner of the award was Ali Dabaja, CEO of Hajjnet, a platform that guides pilgrims through Hajj and Umrah, the two major rituals in Islam.
“When we launched the Islamic economy award two years ago, we found that innovation plays an important role, especially as more and more companies are going digital for expansion, even though they might have limited investments,” Adil said. “We wanted the Innovation 4 Impact to be a source of inspiration for others, not just a recognition for companies.”
In short, the Islamic economy is an open platform for all entrepreneurs, Muslim or not. The following highlights sum up the challenges, facts and advice the summit dealt with.
The Islamic economy is currently a fertile market for a lot of entrepreneurs, said Chris Abdur-Rahman Blauvelt, Founder of LaunchGood crowdfunding platform.
“Entrepreneurship is about solving problems, and Muslims face a lot of problems,” he said, later emphasizing the importance of having apps targeted for the Muslim audience. “Kickstarter changed entrepreneurship in the US, so I wanted to do something similar with LaunchGood.”
Adil shared Blauvelt’s opinion, where he pointed out that that absence of global trademarks leaves plenty of opportunities for enthusiastic entrepreneurs to develop and scale global companies. Family tourism business Crescentrating, halal food platform Zabihah and a number of Islamic banks who recently open in Britain and Germany are examples, he said.
Internal drive is what matters
“It’s not just about solving a problem and making money, but a service on a deeper, more spiritual level,” Blauvelt said.
Affinis Labs cofounder Shahed Amanullah had a similar opinion.
“If you believe that your religion is mercy for humankind, try to find ways to use it in inventing products that are valuable to society and that transcend boundaries,” he said.
Another speaker on this topic was Rami El Malak, founder of conservative fashion brand Miella. To Rami, building an ecosystem that stands on moral values is essential, where people’s needs are more important than making profit.
The legacy of colonization had a negative impact on the Muslim community, one whose impact is still being felt, Blauvet said.
“Even if you have a good idea, you won’t receive support,” he said. “People might share your ideas on Facebook, but they won’t support you. So Muslims need to think in an entrepreneurial way, they need to realize the importance of of investing in something other than charity work.”
Muslims living in the US must do their part for Muslim culture in order for the sector to become sustainable, he said.
The nanny model
“Taking an idea from the west and changing it and giving it to Muslims...it’s insulting, and does not add any value, especially considering that we want to enable customers and encourage them to express themselves,” Amanullah said.
There is no need, he continued, to create a new Facebook for Muslims, as they’re already on Facebook. There are, on the other hand, better ways of presenting existing ideas, like crowdfunding, and tailoring them to suit the Muslim way of donating.
Blauvelt added that startups need to understand the lifestyle of Muslims to target them correctly and facilitate their lives.
Lack of funding
Lack of funding is the biggest challenge entrepreneurs face in the Islamic economy, followed by prejudices about halal sector, Amanullah said.
Baulvelt believes entrepreneurs can change the negative opinions of Muslims that some may hold.
Entrepreneurship allows them to solve their problems in an innovative way. Still, the sector has a long way to go. Perhaps what the Islamic ecosystem needs are succcess stories like Apple and Google.