In a large conference center near Chicago’s O’Hare International Airport, at the beginning of September, the Islamic Society of North America held its 59th annual conference, the “largest networking event for the Muslim community in the country.”
Alongside various booths advising American Muslims on starting businesses and showcasing the latest Muslim startups, the ISNA conference featured a panel on the growing phenomenon of the “Islamic economy,” with an accompanying description of the event stating that, “The Muslim startup landscape has changed dramatically in the last two decades. Today, the global Islamic economy is represented by $2 trillion of consumer spending.”
Distinct discussion of a discernible Islamic economy is a relatively new phenomenon.
In 2010, the official magazine of the very same Islamic Society of North America featured an article by the academic M.A. Muqtedar Khan, who argued that, at the time, “there is no Islamic economy” and all previous claims of such an industry are “more like wishful thinking than an analysis based on empirical evidence.”
A true Islamic economy, he argued, would disregard an overriding obsession with “interest-free [financial] practices” and instead focus on “the significance of charity, welfare, wealth redistribution and the prevention of income inequalities and wealth disparities.” Muslims, he concluded, should “work toward the economic development and betterment of Muslim societies in real life.”
A 2 Trillion Dollar Industry?
Given the change of rhetoric and behavior within ISNA, perhaps this advice struck a chord.
A new generation of American Muslim entrepreneurship appears the corollary of both Western Islamist discussions about the financial future of American Islam as well as efforts overseas, especially in Turkey and United Arab Emirates, to define businesses run by Muslims not just as Muslim-run businesses, but intrinsically Islamic businesses, which aim to impose Islamic piety and charity while also producing prosperity.
One key guiding idea behind the Islamic economy is that it pursues both innovation and technology, while also adhering to and ensuring the proliferation of acceptable Islamic behavior.
An Emirati report, published in collaboration with Thomson Reuters in 2019, for instance, explains that some Islamic economy corporations have “adopted blockchain technology for payments, to confirm halal compliance.” New products and services produced by the Islamic economy include “smart technologies ... incorporated into clothing such as the smart hijab” (one such product is a Bluetooth-equipped garment that allows wearers to "[listen] to high quality Quran/audio” and make phone calls) as well as “GPS systems that show the closest prayer spaces.”
These companies are underpinned by “Islamic finance based on ethical, shariah-based principles,” such as “Blossom Finance ... with its blockchain solution to help SMEs raise sukuk finance [sharia-complaint loans and bonds].”
This industry, its proponents claim, is the “fastest growing segment of the world’s economy.” The Emirati report estimates that the:
global Muslim spend across lifestyle sectors was US$2.1 trillion in 2017, while the Islamic finance sector has US$2.4 trillion in total assets. Food and beverage leads Muslim spend by category at US$1.3 trillion, followed by clothing and apparel at US$270 billion, media and entertainment at US$209 billion, travel at US$177 billion, and spending on pharmaceuticals and cosmetics at US$87 billion and US$61 billion respectively.
Notwithstanding, there is evidently a global effort underway, and it has state backing. Countries such as the UAE, Saudi Arabia and Turkey are busy establishing thinktanks and government departments dedicated to the advancing these new Islamic industries.
But while the backing for the Islamic economy may come from the East, the main concentration of innovation is appearing in the West.
American Muslim Entrepreneurship
This year, a variety of new Islamic startups were noticeably present at ISNA’s conference, competing to present their wares. USHUB, for instance, is an Islamic streaming service that offers comedy shows, movies, clerical discussions along with both Islamist and progressivist-themed documentaries. USHUB promises to “center and support Muslim creators and filmmakers” and provide “inclusion” and community.”
USHUB is just one member of a large array of Muslim businesses and financial platforms that has sprung up over the past few years.
Perhaps the most prominent example of the new Islamic economy in the United States is LaunchGood, a crowdfunding platform used by nonprofits, Islamic clerics and community groups. Established in Detroit in 2013, the online fundraising organization seeks to “inspire & empower Muslims globally.” It was also present at the ISNA conference, with its founder speaking on the Islamic economy panel.
LaunchGood boasts – and there is little reason to doubt it – of having raised $350 million from over a million donors, funding almost 50,000 charitable campaigns and community projects.
And yet LaunchGood is “not a charity,” warns Muslim commentator Ahmed Shaikh, but a “commercial enterprise.” As much as 8% of the monies raised for funded projects on LaunchGood, Shaikh notes, goes as profit to the platform itself.
As noted in a recent study of the economics of American Islam, published by the Middle East Forum, Western Islamic institutions have, in recent years, become wealthy and self-sufficient – no longer reliant on foreign patrons and Islamist governments.
Institutions such as LaunchGood are evidence of this success. These new for-profit institutions are busy building Western Muslim wealth through projects that declare strong Islamic tenets while pursuing prosperity. Per Muqtedar Khan’s advice, they aim to reward not just private investors but also advance philanthropy and “social justice” – carried out by nonprofit Islamic industries on which so many Muslims (and Islamists) have long relied to advance religious and political ideas.
There are two leading components to this new Western Islamic entrepreneurship: a financial and logistical support structure, such as Launchgood; and a new wave of Muslim startups, many closely based on their non-Muslim Silicon Valley counterparts, such as USHUB.
Other financing, support and infrastructure initiatives include the British firm, ProductiveMuslim, which mixes self-help and “productivity training” guides with Islamic ideas about balancing the dunya (temporal world) with the akhirah (hereafter).
And there is DeenDevelopers – a collection of “techies and creatives” who seek to solve “societal problems” through “hackathons” and other technological ideas and networking efforts. Some of its efforts appear to focus on providing various software tools for traditional Islamic institutions better to encourage Muslim piety.
More tangible forms of the support underbelly are found among the hundreds of new Western Islamic financial institutions – an enormous supply of crowdfunding and investment platforms, venture capital firms, a growing variety of Western Islamic banks, as well as various Islamic “fintech” firms. These companies have moved beyond the fixation with usury bemoaned by Khan, and instead concentrate on providing the capital and other financial services for the new Islamic economy.
Examples include Zoya, a “halal investing co-pilot” that helps its customers build a “shariah compliant investment portfolio.” Or there is Wahed, a New York-based “online ethical investment platform” and reportedly the “first exchange-traded fund in the United States ... compliant with Sharia law.”
This support sector partly serves to underpin the second major component of this new Western Islamic industry: a new generation of Muslim startups, which build and sell Islamic alternatives for a wide variety of products and services.
Salam Sisters, for instance, sells hijab-wearing dolls and storybooks, aiming to celebrate “achievements of real Muslim women” such as Ilhan Omar.
Muzz, meanwhile, is a dating app designed to draw Muslims away from mainstream dating applications, ostensibly “full of sin.” (Muzz drew its ideas openly from the non-Muslim competition, including dating app Tinder, ultimately leading to a trademark lawsuit, which Muzz lost).
In fact, hundreds of similar startups have been set up over the past decade, including firms focused on “sharia-compliant” cryptocurrency and blockchain, “modest” fashion, “halal-friendly” travel, among others.
LaunchGood and their partners call on Muslims across the West to “help [these] rising stars of the Ummah achieve their potential.”
Naturally, this growing industry has also attracted some seedy elements. Today, for instance, Western Muslim YouTube users are regularly peppered with YouTube advertisements offering halal get-rich-quick schemes by dubious American Muslim “influencers” such as Othman Tmoulik of Unstoppable Entrepreneurs, who mixes claims of Islamic piety with promises of an “exploding RISK-FREE Online Business Opportunity” but only “if you are a Muslim man, ready to invest in yourself ... Mashallah.”
The Islamic economy is held up as a means to strengthen and unite Muslims globally, something that Islamists, whether through violence or the ballot box, have otherwise thus far failed to do. Undoubtedly, some of its advocates are opportunists who are utilizing Islam as a marketing tool, but others appear deeply committed to building the Islamic economy globally.
This fast-growing idea is not necessarily destined to be a tool for extremists, but it cannot have escaped Islamists’ minds that these industries offer new and powerful opportunities to spread and impose their own dogmas.
