Malaysia receives a lot of praise for its JAKIM halal standards, now recognised in over 80 countries. As of December 2025, more than 10,000 companies, with 80 per cent being small and medium enterprises (SMEs), hold official Malaysian halal certificates.

This represents a significant increase from just over 9,000 in July 2024. This growth is largely due to the full digitalisation through the MYeHALAL platform, launched in May 2025.

These figures show that our halal ecosystem has matured. However, the main challenge going forward is staying ahead of global competitors.

Halal exports reached US$7 billion (approximately RM29.31 billion) in the first half of 2025 alone, making up 16.1 per cent of the nation’s total exports.

The growth is real, but maintaining it requires more than just compliance; it requires innovation.

At the Global Halal Summit 2025, Prime Minister Datuk Seri Anwar Ibrahim reminded everyone that “halal is not just a label, it is a symbol of integrity, ethics, and universal Islamic values that the world now embraces as a viable economic model”.

He encouraged Malaysia to transition from merely issuing certificates to becoming a global leader in halal innovation, setting a bold target of RM80 billion in halal exports by 2030 under the Halal Industry Master Plan (HIMP) 2030.

The summit, themed “Integrity, Sustainability, and Resilience,” also highlighted Malaysia’s “halal diplomacy” in bilateral discussions, such as at the KazanForum in Russia and the BRICS Summit in Brazil.

Additionally, it generated RM4.5 billion in projected sales at the concurrent MIHAS 2025 trade fair.

From compliance to value creation

Many halal SMEs still focus on compliance, aiming to meet the minimum requirements, get the logo, put it on the packaging, and call it finished.

This approach is no longer sufficient. Non-Muslim-majority countries like Japan, South Korea, Thailand and Brazil are aggressively entering the halal market with better product innovation and branding.

Our recent research indicates that business owners and managers with an innovative mindset are much more likely to show innovative behaviour.

They create new ideas, support them, and make them happen. This behaviour leads to better innovation performance and, ultimately, lasting competitive advantage.

In summary, having an innovative mindset drives us from just meeting standards to setting new ones.

In 2025, initiatives like the Malaysia Halal Certification Initiative (ISPHM) processed 96 per cent of applications within 30 days, allowing SMEs to concentrate on Industry 4.0 innovations such as AI-driven audits and blockchain traceability instead of filling out paperwork.

The six core elements of an innovative mindset

Research identifies six key traits that halal entrepreneurs need to adopt:

1. Trust: Building strong confidence throughout the supply chain.
2. Resilience: Turning every setback into a learning opportunity.
3. Diversity: Staying open to ideas and cultures different from our own.
4. Mental strength: Thriving under global market pressure.
5. Pursuit of excellence: Seeking world-class quality, not merely “good enough”.
6. Collaboration: Being willing to partner with competitors to access new markets.

When these traits become second nature, our halal industry will be guided not just by Syariah but driven by cutting-edge innovation.

Recent studies from 2025 show that SMEs adopting this mindset improved performance by up to 20 per cent using technologies like AI halal auditing, which aligns perfectly with HDC’s goal of training more Bumiputera entrepreneurs in high-value innovation.

The kind of halal innovation we need

An innovative mindset has already led to exciting breakthroughs: blockchain for complete supply-chain transparency, artificial intelligence for quicker and more precise halal audits, plant-based alternative proteins appealing to both Muslim and non-Muslim consumers, and eco-friendly halal cosmetics meeting increasing global demand.

These examples clearly show that halal is clean and pure, but it is also modern, sustainable, and premium.

The global halal cosmetics market alone is expected to reach US$113 billion by 2028, with Malaysia leading in the export of green, halal-certified beauty products through initiatives like HalalChain designed for SMEs.

A supportive ecosystem is essential

Entrepreneurs cannot achieve this alone. The government continues to provide tax incentives for halal R&D and matching grants that connect companies and universities.

Higher education institutions are increasingly incorporating innovation, data science, and modern product design into their halal programmes.

Certification bodies are streamlining procedures and recognising trustworthy foreign halal certifiers to ease the path for exporters.

Thanks to this whole-of-nation effort, Malaysia has now ranked first in the State of the Global Islamic Economy Indicator (SGIE 2024/25) for the 11th year in a row, surpassing Saudi Arabia, Indonesia, the United Arab Emirates and Bahrain.

Global Muslim consumer spending reached US$2.43 trillion in 2023 (an increase of 5.5 per cent), while Islamic financial assets totalled US$4.93 trillion, both expected to see significant growth by 2028. However, rankings alone are not the goal; they must translate into groundbreaking products that dominate shelves worldwide.

Conclusion

As the Prime Minister highlighted, halal is a symbol of international trust. Yet, symbols must evolve. They need to be continually strengthened by quality, sustainability, and ongoing innovation.

Malaysia has a solid foundation with JAKIM’s credibility, HDC’s expertise, and years of export experience.

The future, however, depends on how deeply we can embed an innovative mindset into the core of our halal industry.

If we succeed, Malaysia will not just maintain its position as the world’s halal leader; we will become the undisputed global hub for halal innovation, a model for the entire world.

-- BERNAMA

Dr Mohd Nur Ruzainy Alwi is a Senior Lecturer at the Department of Business Management, UNITEN Business School, Universiti Tenaga Nasional (UNITEN).