Islamic entrepreneurship : a case study of the Kingdom of Saudi Arabia : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Development Studies, Massey University, Palmerston North, New Zealand
The point of departure in this study is that entrepreneurship, regardless of how it is defined, is more than a means to create employment opportunities and maximise economic returns; it is rather a development alternative with great potential to contribute to the well-being of individuals, communities and nations in developed, developing and less developed countries alike. The purpose of this thesis is to explore the entrepreneurship phenomenon from an Islamic perspective within the Saudi Arabia context. The thesis specifically seeks to examine the relationship between Islamic values and entrepreneurial activity and to establish whether these values can be more effectively tapped into to raise the profile of Islamic form of entrepreneurship and promote alternatives to development. The philosophical differences between the Islamic and the prevailing Western world-views on the theoretical as well as the practical aspects of development are fundamental, to the point where they cannot be marginalised or reconciled and integrated within a standardised single development model. Furthermore, the lack of cultural sensitivity on the part of the Western model and its inability to account for variables specific to the Islamic cultural and institutional environment justify the need to search for an alternative Islamic model of entrepreneurship that best serves the ultimate goal of the Muslim nation (ummah), that is, realising the state of well-being (falah). Despite the suggestion of modernisation theories of development and the prevalent conventional assumption that Islam is intrinsically anti-modernisation and anti-development, and that the religiously based Saudi culture would be the foremost obstacle in the way of cultivating a dynamic entrepreneurship class in Saudi Arabia, the findings of this study indicate otherwise. There is no evidence of incompatibility between Islamic values and entrepreneurship. Lack of entrepreneurial dynamism in Saudi Arabia by no means can be attributed to adherence to Islamic values and business ethics; rather, it can be linked to the state's failure to assimilate the implication of entrepreneurship and consequently to integrate Islamic values into its developmental process. This research indicates that Saudi entrepreneurs embrace positive perceptions and attitudes regarding the role of Islamic values in promoting productivity through entrepreneurship. This positive attitude is independent of both the demographic backgrounds of the entrepreneurs and the physical characteristics of their enterprises. Analysis of case studies of Saudi entrepreneurs revealed inconsistencies between the attitudes and practised behaviours of Saudi entrepreneurs, and the reality of the Saudi entrepreneurship landscape. The personal in-depth interviews with various stakeholders explained this divergence mainly in terms of entrepreneurship policy vacuity and incompatibility between Islamic values and the existing institutional framework, most evident in the financial sector. The findings of this study further confirm that Islamic entrepreneurship is a concept that is misread by the vast majority of Muslims at individual as well as at state levels. Arguably this misinterpretation has caused, and at the same time is largely caused by, the neglect of policymakers, lack of institutional support and deficiency in educational systems that lacked the focus on entrepreneurship development. The study therefore emphasises the need to rethink the current official approach to entrepreneurship, and highlights the importance of devising entrepreneurship policies that draw from local experiences and cultural values. Building a viable entrepreneurship sector also requires the intervention of the state, most likely through a combination of directive as well as facilitative policies. However, the exact form, scope and nature of government intervention should be mapped in line with the findings of future policy-oriented research. The main challenge for Islamic (development) remains operational in nature: how can the Islamic entrepreneurship model be transformed into working policies and enabling institutions? Furthermore, how can any Islamic business ethics be operationalised in the context of the contemporary business environment in order to reap the benefits of Islamic entrepreneurship? These basic questions bring about the inevitable question of whether or not the behaviour and the performance of Islamic entrepreneurship can be or should be judged in the absence of a true "Islamic state where the whole realm of socio-economic human behaviour is engineered according to Islam"1.