Entrepreneurship is an essential engine of economic growth, innovation, and empowerment. Yet, in many Muslim‑majority countries the rate of new business formation remains significantly lower than in developed economies. A recent study examining 27 Muslim‑majority countries over the period 2004–2023 found an average of only 1.15 new business registrations per 1,000 working‑age people, compared to an average of 3.8 per 1,000 in OECD economies. 

Key Findings

Institutional quality (governance, rule of law, regulatory effectiveness) and digital infrastructure (e.g., mobile subscriptions) were found to be critical drivers. A one‑unit increase in institutional quality corresponded to a 69.4% rise in new business registrations in the sample. 

A 10% improvement in digital infrastructure (mobile subscriptions per 100 people) translated into a 2.9% increase in new business formation. 

Interestingly, higher economic development in some contexts was associated with lower entrepreneurial activity, likely due to a shift toward capital‑intensive sectors rather than startup ecosystems. 

What This Means for the Ummah

For the global Muslim community — over 1.9 billion strong — such a gap in entrepreneurial activity has real consequences: fewer home‑grown startups, limited innovation rooted in Muslim identity and values, and reduced capacity for local job creation and economic self‑determination. Especially in diaspora communities (London, Dubai, Toronto, New York), this means Muslim entrepreneurs may face structural disadvantages: weaker ecosystems, less mentorship, fewer role models, and less digitally‑enabled infrastructure.

How Startup Muslim Can Lead

Offer mentoring and capacity‑building programmes aimed at improving digital readiness and regulatory navigation for Muslim entrepreneurs globally.

Publish regular data‑driven insights on entrepreneurship in Muslim‑majority countries, helping benchmarking and progress tracking.

Facilitate diaspora‑to‑home market linkages: connect entrepreneurs in resource‑rich centres with home‑market founders to share infrastructure and network advantage.

Advocate for policy and institutional improvement in home markets: better governance, clearer regulatory regimes, improved digital infrastructure will benefit the entire Ummah.

Bottom Line

The entrepreneurial deficit in many Muslim‑majority countries isn’t due to a lack of ambition—it’s rooted in structural barriers. With targeted action, your platform can help unlock a massive latent potential for Muslim‑founded ventures worldwide.