International http://isb.sagepub.

com/
Small Business Journal

Book Review: Islamic Entrepreneurship

Ali Aslan Gümüsay
International Small Business Journal 2013 31: 834
DOI: 10.1177/0266242612470355

The online version of this article can be found at:

http://isb.sagepub.com/content/31/7/834

Published by:

http://www.sagepublications.com

Additional services and information for International Small Business Journal can be found at:

Email Alerts: http://isb.sagepub.com/cgi/alerts

Subscriptions: http://isb.sagepub.com/subscriptions

Reprints: http://www.sagepub.com/journalsReprints.nav

Permissions: http://www.sagepub.com/journalsPermissions.nav

Citations: http://isb.sagepub.com/content/31/7/834.refs.html

>> Version of Record - Oct 18, 2013

What is This?

Downloaded from isb.sagepub.com at UNIV OF PITTSBURGH on December 1, 2014

834 International Small Business Journal 31(7)

do, or should, we see the process of the internationalisation of this industry as the extension and
replication of the US model? By contrast, to what extent do differences in governance structures,
institutional environments and historical trajectories require the development of an industry pat-
terned on very different lines? Certainly, some of the evidence cited by the authors suggests that in
many emerging economies, PE is developing more rapidly than VC (or indeed angel finance).
Given that this development in many cases reflects the dominant role in the financial systems of
many of these economies of sovereign wealth funds, this points back to the question of the role of
government in the VC/PE industry. As Josh Lerner recently pointed out in his Boulevard of Broken
Dreams (2009), the major hubs of entrepreneurial activity – Silicon Valley, Tel Aviv, Singapore –
all bear the marks of government investment, but not all government investment is judicious. The
authors of the current volume leave us with the unanswered question: what kind of VC/PE industry
business model, and what role for government, are appropriate to develop what kind of entrepre-
neurial ecosystem in these very different institutional environments?

Reference
Bygrave WD and Timmons JA (1992) Venture Capital at the Crossroads. Cambridge, MA: Harvard Business
School Press.
Lerner J (2009) Boulevard of Broken Dreams: Why Public Efforts to Boost Entrepreneurship Have Failed.
Princeton, NJ: Princeton University Press.

Rasem N. Kayed and M. Kabir Hassan, Islamic Entrepreneurship. Oxford: Routledge,

2011. xvii + 357pp. ISBN 978-0415584494, £100 (hbk).

Reviewed by: Ali Aslan Gümüsay, University of Oxford, UK

DOI: 10.1177/0266242612470355

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 entrepre-
neurship. 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 reli-
gion in entrepreneurial activities. While the book is very much shaped by writers on Islamic eco-
nomics 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 com-
patible 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 con-
textualised: 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 com-
ments about the monarchy itself. The triangulation approach consisted of a survey and

Downloaded from isb.sagepub.com at UNIV OF PITTSBURGH on December 1, 2014

Book Reviews 835

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 entre-
preneurs, 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 the-
ory 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 entrepre-
neurial 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

Downloaded from isb.sagepub.com at UNIV OF PITTSBURGH on December 1, 2014

836 International Small Business Journal 31(7)

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 founda-
tion 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.

References
Basu A and Altinay E (2002) The interaction between culture and entrepreneurship in London’s immigrant
businesses. International Small Business Journal 20(4): 371–393.
Chapra MU (2000) Is it necessary to have Islamic economics? Journal of Socio-economics 29(1): 21–37.
Siddiqi MN (1979) The Economic Enterprise in Islam (2nd edn). Lahore: Islamic Publications.

Downloaded from isb.sagepub.com at UNIV OF PITTSBURGH on December 1, 2014