Strategies to Create Sharia-Based Competitive Advantage for SMEs in The Era of Industrial Revolution 4.0

  • Mutiara Eka Putri Raden Intan State Islamic University
  • Tulus Suryanto Raden Intan State Islamic University
  • Hanif Hanif Raden Intan State Islamic University
Keywords: Competition, Small and Medium Enterprises, Industry


Small and medium enterprises (SMEs) play a vital role in the Indonesian economy. However, they face challenges in maintaining competitiveness during the Industrial Revolution 4.0. Integrating sharia values in business strategy could become a key competitive advantage for SMEs. This study aims to analyze sharia-based competitive strategies for Indonesian SMEs in the era of Industrial Revolution 4.0. An exploratory qualitative approach is utilized by conducting interviews and focus group discussions with experts in sharia economy as well as owners of Islamic-based SMEs. The findings reveal that applying principles of Islamic business ethics, utilizing Islamic financial schemes, adopting halal and green process standards, and integrating information technology with spiritual values are prominent strategies to achieve sustainable competitive advantage. The results also highlight the importance of strong leadership, robust Islamic business networks, competent human capital, and product innovation. A competitive strategy model is formulated to guide SMEs in building sharia-based competitiveness to seize opportunities in the digital economic landscape. This research provides practical and scholarly contributions toward strengthening the Islamic economy system and enhancing the competitiveness of Indonesian SMEs to realize national economic growth. Further studies can test the proposed model empirically across various industries and regions.


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