The Rise and Power of Crowd and What it means for Islamic Finance

Sadia Karim Current Issues in Islamic Finance, Human Resources in Islamic Finance, Islamic Finance Education, New & Noteworthy 1 Comment

The future is in the crowd as much as it is in the cloud. Both go hand in hand. What do I mean by that?

When Wikipedia was first launched in 2001 by Jimmy Wales and Larry Sanger, the concept of an open source online encyclopedia, not controlled by a single organization rather editable by anyone was beyond comprehension and against popular acceptance. Fast forward December 2014, Wikipedia ranks number 7 in world’s most popular website by number of traffic it attracts. It became the most popular crowdsourced information portal in internet history.

During the same decade another quiet revolution has been going on in the global labor sector. Instead of working for a single organization, freelancers found online platforms to utilize their talents and get paid from multiple sources rather than searching for single cubicle. Organizations found savings option from their payroll budget realizing the power of crowdsourcing labor for relevant tasks. By 2012, 99designs, the Australian-US startup paid out $40 million to its 180,000 graphic designers. Over 266,000 freelancers in India earned nearly $150 million from Elance by the same year. Big name companies like Cisco, and HP became among the 480,000  clients of Odesk that boasted 2.4 million registered users in 2012. In 2014 Elance and Odesk  merged with 750 million users with annual processing of $900 million through the platform. Organizations are getting their job done and talents are not living paycheck to paycheck while being able to be part of a rising global crowdsourced workforce. This phenomenon has given rise to micro entrepreneurs worldwide who are producing outstanding results by tapping into niche market demand and solving their problems.

In 2009 crowdfunding started to become an industry in itself after the success of ArtistShare, the first formal crowdfunding website founded in 2000 to fund projects of creative artists. Crowdfunding has been growing since then giving tremendous opportunity to entrepreneurs to fund their dreams. In March 2014, Kickstarter marked its milestone of $1 billion in pledges. According to a study by World Bank by 2025 the global crowdfunding industry could potentially reach between $90 – $96 billion. Crowdfunding plays the role in between traditional bank loans which are increasingly becoming unpopular for SMEs, and microfinance which is designed to support poverty reduction causes in the developing world. For global entrepreneurs, crowdfunding offers the easiest and fastest way of raising funds for their projects.

What does it all mean for Islamic Finance? How does the industry leverage these trends in technology, labor market, funding sources and other areas in its favor?

Education and research shape the future of an industry.

When it comes to education sector, we are still stuck in the postindustrial era in designing curriculum, teaching and learning method. Experts understand the flaws and irrelevancy of the existing education system today, but changing the status quo requires bold steps in the much chaotic world we live in.

Islamic Finance education sector suffers from not just the irrelevancy of existing education system but a lot more complexity that is hindering its efficiency and effectiveness. It is about time to think of a radical change.

How can the rise and power of crowd be leveraged to bring that radical change?

Answer to that question, next time – on Yurizk blog.

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