The Impact Of Start-Up Founders And Islamic Financial Industry On Economic Increment In Indonesia

Abstract

High-tech-based companies have attracted many investors, especially with the support of faster 5G internet networks. The digital economy has provided concrete evidence of its impact, particularly during the COVID-19 economic crisis. In 2023, Indonesia ranked 5th globally in startup activity. With 84.35% of Indonesia's population being Muslim, the Islamic finance industry has seen rapid growth. During Ramadan, startup transactions skyrocketed, but the presence of the Islamic finance industry remained suboptimal. In 2023, e-commerce in Indonesia saw a significant increase, with 78% of the population—approximately 278.7 million people—engaging in online shopping. This qualitative research approach re-describes field data and clarifies findings from a literature review, sourced from various articles, books, and other scholarly works. The research highlights that interest in online shopping has steadily increased, with startups contributing 4% to Indonesia's GDP. The Islamic finance sector, with its Sharia principles, has the potential to drive economic recovery and reduce poverty. However, despite the fact that 87% of Indonesia's population is Muslim, startups remain largely reliant on conventional banks for capital, as they are not yet fully integrated into the Islamic finance system.