Objective: This study aims to analyze the economic transformation of Islamic boarding schools through case studies of Sidogiri Islamic Boarding School and Idrisiyyah Islamic Boarding School, as well as identify the success factors of integrating religious values and modern business management. Theoretical framework: This research uses the concepts of Islamic economics, community empowerment, and social entrepreneurship that emphasize the integration of spiritual values with professional business management. Literature review: The literature shows that pesantren not only function as religious educational institutions, but also develop into centers for community-based economic empowerment and social entrepreneurship. Method: The study used an instrumental comparative case study approach by comparing the economic transformation of the Sidogiri Islamic Boarding School and the Idrisiyyah Islamic Boarding School. Results: The results of the study show that the two Islamic boarding schools have succeeded in developing various community-based business units. This success is supported by the kyai-santri relationship, the concept of solemnity, spiritual values, and community loyalty. Implications: Pesantren have great potential as agents of economic empowerment and sustainable development that support the achievement of the SDGs, especially poverty alleviation and inclusive economic growth. Novelty: The novelty of this research lies in the analysis of the integration of religious traditions and modern business management in the economic development of pesantren and its contribution to the SDGs in Indonesia.
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