Islamic economy gaining huge relevance worldwide
With Islamic finance rapidly changing the way we do business today and going increasingly mainstream, the Islamic economy has proven its capability to not just drive national economic growth but also help heal the wounds in the aftermath of financial crises that have left millions of people across the world disillusioned and seeking a more organised and meaningful economic system.
Unfortunately, it took the global financial crisis of 2008 for the world to truly understand the potential that lies within the Islamic economy ecosystem. Both Muslims and nonMuslims today are waking up to the fact that conventional finance with its unfettered market mechanisms is not always the most effective means to ensuring long-term sustainable growth. With the plummeting of oil prices and the volatility of the stock markets, the Islamic economy is increasingly gaining momentum and tremendous global relevance for its tenets of an ethical and just financial system.
Let us examine some aspects of Islamic economy that have given it this credibility and context within a relatively short span of time.
In its ethics and values, the Islamic economy focuses on the real value of money, and has an inherent sense of fairness, shared risk and zero tolerance for speculation. In addition, the Islamic economy's principle of social distribution of funds has captured the attention of a world seeking a more stable and responsible economic future. People have traditionally remained cynical about the possibility of innovation in a Sharia-compliant economy. My message to sceptics and naysayers is simply this: Adopting a more ethical and responsible approach to business and investments is in itself an innovative step that will leave behind a legacy our next generation will thank us for.
While the world today is seeking innovative and sustainable solutions for the preservation of natural wealth, Islam had centuries ago adopted sustainability as the core of all economic and social development practices.
What is innovation, after all? And why should we place it at the top of the agenda? Simply put: Innovation is about redefining a product's value and meaning. I believe we all agree that innovating simply for the sake of innovation makes no sense.
Innovation must address current challenges, such as environmental concerns, job creation and economic recovery. It has to be logically sound. It has to drive business - not to what is popular but to what is right, to focus on quality rather than quantity, and on the common good rather than individual profits.
In the last three years, we have witnessed Islamic economy sectors buzzing with innovation and entrepreneurship. The UAE has been at the forefront of promoting an economy beyond oil, suggesting the need to think of sustainability as the way forward in all business transactions. This vital change in the culture of investment will eventually shape investment trends and influence the emergence of a sustainable investment landscape.
While the fast-growing and predominantly young Muslim population of 1.7 billion represents a major client base for businesses around the world, the ambitious new generation itself offers hope of rejuvenating global economic growth.
From the UAE, Indonesia and Malaysia to the United States, the UK and France, and everywhere in-between, budding entrepreneurs are contributing to social and economic development in creative ways - at a time when the sole intention of all businesses around the world is to prioritise economic diversification and promote non-oil growth. Whether it is in mobile banking, e-commerce, technology, medicine, or halal products, companies are competing to come up with new solutions to create wealth, governed by sustainability and responsible practices. At the Dubai Islamic Economy Development Centre (DIEDC), we believe that innovation is a work in progress.
During the Global Islamic Economy Summit 2015, we launched the ' Innovation 4 Impact' competition in collaboration with the Dubai Silicon Oasis Authority and Thomson Reuters. The aim of this initiative was to support start-ups and businesses in the Islamic digital economy space and serve as an incubator for SMEs across the world. The Dubai Technology Entrepreneur Centre is yet another enabling initiative launched by the Dubai Silicon Oasis Authority that allows young entrepreneurs to innovate and advance their businesses within a highly motivating and efficient work environment.