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Through a literature review, this research investigates how Islamic economic theory has contributed to the rationalisation of education in Indonesia. An integrative education system that harmonises material and spiritual aspects is built on the principles of justice, balance and benefit. Therefore, Islamic economic philosophy provides a framework for moral and spiritual education that produces morally and intellectually strong people. In order to deal with globalisation and create a generation that is grounded in moral principles and thinks logically, this application is essential. To incorporate Islamic economic philosophy into national education policy and create a globally competitive education system that preserves regional spiritual and cultural values, curriculum design, teacher training and stakeholder participation are necessary.

Generation Z (born between 1997 and 2012) has been socialised in the digital age, which has informed their social interactions and cultural awareness. This study assesses the role of Generation Z in maintaining national identity in the context of globalisation, employing a Likert-scale interview methodology with university students aged 18–22 at Universitas Gadjah Mada. The results indicate that the majority of respondents exhibit a robust sense of patriotism (53.6% strongly agree) and express support for the preservation of national identity (70% agree/strongly agree). However, a small percentage of respondents express doubt (18.4%) or disagreement (5.2%). Generation Z proactively employs social media to advance local culture, address social issues, and reconcile global influences with local values. Despite the challenges posed by globalisation, they demonstrate a commitment to maintaining Indonesia's cultural heritage. This study recommends culturally relevant education tailored to the digital era to support Generation Z in preserving national identity while adapting to global developments.