Abstract
Much research has a theoretical and empirical focus on the West and may not be applicable to other parts of the world. Islamic economics and particularly Islamic finance have become widely used terms to provide a contextualised lens. This book, based on a doctoral dissertation by Rasem Kayed, adds Islamic entrepreneurship to the list by introducing an Islamic perspective to entrepreneurship. It is a significant, albeit only first, step into an important topic in an under-researched area on the contextualisation of entrepreneurship, and more specifically the role of a specific religion in entrepreneurial activities. While the book is very much shaped by writers on Islamic economics such as Siddiqi (1979) and Chapra (2000), with a strong value-based development agenda, Professor Rodney Wilson rightly states in the foreword that the book fills ‘an obvious gap in the literature’ – and it uncovers many more.
Entrepreneurship is introduced as having a crucial role in socio-economic development. It is in theory ‘a developmental alternative’ (p. 18), although not yet in practice at the research site (cf. Chapter 8). Yet to have positive effects on development and modernisation, entrepreneurship needs to be compatible with contextual values. Rather than adapting the western model of entrepreneurship and thereby attempting to westernise, the authors argue that entrepreneurship theory and practice need to be contextualised: in this specific research project, to an Islamic environment. The authors deduce that Islam itself is an entrepreneurial religion, and therefore conducive to entrepreneurial endeavour.
Saudi Arabia was selected as the research location and fieldwork was conducted in 2004. The authors provide a careful description of the Saudi political system with not much evaluative comments about the monarchy itself. The triangulation approach consisted of a survey and semi-structured interviews: 97 out of 288 Saudi entrepreneurs returned questionnaires that were deemed usable. Consequently, semi-structured interviews were performed with 17 of these entrepreneurs, and further interviews conducted with Saudi officials, intellectuals and specialists. In addition, secondary data in the form of documents and reports were collected and analysed.
The data show that entrepreneurship is considered to be an economic as well as a religious activity. The Saudi entrepreneurs viewed Islam favourably as supporting entrepreneurship in theory as well as in practice. Yet a ‘negative attitude of Saudis towards certain business activities’ (p. 292) is depicted, which is due partly to the oil-based reward structure of the rentier economy. Institutional barriers and missing institutions were identified as key structural problems, and institutional change particularly in the public, finance and education sector deemed necessary to encourage and enable more entrepreneurship in general and entrepreneurship based on Islamic values specifically.
The Islamic entrepreneurship model targets human well-being and is based on two dimensions: a religious one for spiritual security, which is built on altruism and worship; and an economic one for socio-economic justice. Business activities are required to be lawful, morally desirable and socially acceptable; resources need to be halal (permitted), and the result of entrepreneurial activity is not only supposed to be wealth creation, but also to contain a socio-religious dimension to please Allah and help the community. In Chapter 3 the authors refer to various parts of the Qur’an and sayings of the Prophet related to brotherhood, righteousness, love and the centrality of worship. In Chapter 6 the authors list motivational Qur’anic verses and prophetic sayings mentioned by the interviewees in support of entrepreneurial activities and certain business values. The six case studies in Chapter 7 provide rich narratives on the views of Saudi entrepreneurs: for example, on the concept of rizq – Allah is understood as the ultimate provider or sustainer. Humans are supposed to work hard, while recognising their dependence on divine power and putting absolute trust in Allah.
The authors regard the Islamic entrepreneurship model as a means of generating debate rather than a representation of the real world (cf. p. 288). Indeed, Islamic entrepreneurship requires much more research as many questions remain unanswered. What are the theoretical underpinnings of Islamic entrepreneurship? What are their effects? Is there dispersion between theory and practice? Are there alternative Islamic entrepreneurship models which can be derived from theory or practice? How do we test the descriptive accuracy of the quite complex suggested model and its practical impact? Is religion and not culture, climate, geography or demography, the key variable to analyse entrepreneurship in certain locations – and if so, why? As the authors point out on p. 63, Basu and Altinay (2002) infer from an empirical study among London’s immigrant businesses that cultural aspects may have a greater role than religious convictions, and that the Muslim entrepreneurs very much employed conventional, arguably non-halal, financing tools.
Furthermore, the model was based on research from a specific location, namely Saudi Arabia. Verification and generalisation requires testing in other locations. Data was collected mainly from Muslim Saudi entrepreneurs. Surveys and interviews may overstate the role of religion in entrepreneurial practice, and rather indicate what interviewees would like to be than what actually is: the interviewee may even think actions to be primarily based on religion. The authors point out that ‘neither state policies and institutions nor the formal and higher education systems showed more than a scanty interest in Islamic entrepreneurship’ (p. 273). The interviewees themselves did not bring the topic of Islamic entrepreneurship into the discussions (cf. p. 233). Thus, an important question is how much is Islamic entrepreneurship theorised and practised? On p. 90 the authors state: ‘While the Western entrepreneur is driven towards entrepreneurship mainly by self-interest and the desire for individual profit, the Muslim entrepreneur starts a business with the intention of pleasing the Almighty Allah.’ Whereas this may have a theoretical foundation in Islamic sources, it is arguable to what extent this is genuine in practice. Potentially, intensive ethnographic case studies could provide rich exploratory data, and large-scale quantitative studies may offer results to verify and generalise.
A key underlying question in this endeavour is whether Islamic entrepreneurship actually exists, and whether its uniqueness and role justifies a special model. Does Islam offer a theory of Islamic entrepreneurship, or does Islam offer certain ethical foundations and rules which shape practice? (A similar question may be asked with regard to Islamic economics and Islamic finance.) In other words, should the book title be ‘Entrepreneurship Based on Islamic values’ or ‘Entrepreneurship: An Islamic Perspective’ rather than ‘Islamic Entrepreneurship’? Also, the model is positioned as ‘an alternative to the prevailing Western style of entrepreneurship’ (p. 1), yet the attribute ‘Islamic’ may be a complement than a substitute. Many forms of ethical entrepreneurship exist, such as social entrepreneurship. It would be important to compare religiously, ethically and socially based entrepreneurial activities in the West with so-called Islamic entrepreneurship.
The book is a very good first larger endeavour in the research area. As research on Islamic entrepreneurship is in its infancy, it cannot act as an overview of Islamic entrepreneurship, but rather as a first introduction sparking further research on framing Islamic entrepreneurship vis-à-vis other value-related religious, social and culturally shaped entrepreneurship, expanding it towards other research sites outside Saudi Arabia, elaborating on a theological-theoretical foundation of Islamic entrepreneurship as well its practice and contextualising entrepreneurship theory and practice. The book contains many helpful theoretical and empirical insights as well as policy implications and suggestions for further research.
The authors emphasise the importance of contextuality of entrepreneurial research and derived implications and recommendations. Islamic values impact entrepreneurial practice, and hence may need to be incorporated in entrepreneurial research and derived policy implications. Other value drivers and context-related characteristics need to be weighted to conceptualise how much Islamic values shape entrepreneurial practice. The specific model by the authors requires empirical testing. It is also very complex, and for the sake of parsimony might benefit some simplification. Both theory and practice require further investigations across space and time with a focus on what Islamic entrepreneurship theory and practice is, what discrepancies exist between theory and practice, and how they can and whether they should be overcome. Also, evaluative research needs to be conducted on the effects of Islamic values specifically, and religious values in general on entrepreneurship. Contextual values ultimately need to be incorporated into theory and practice and consequently evaluated so as to derive policy implications.
Kayed and Hassan provide valuable insights which need much further analysis and elaboration to develop a theoretical and empirical understanding about the role of Islam in entrepreneurship. This is a balancing act of adding explanatory value while not neglecting the value of parsimony. The book is also part of a wider quest to incorporate values into business as well as contextualising theory. Kayed and Hassan’s ‘Islamic Entrepreneurship’ marks an opening step of incorporating Islamic values into entrepreneurship research.