Digital infrastructure creates new forms of dependence that the traditional concept of sovereignty was not designed to address.
The New Sovereignty Problem
Traditional sovereignty — the principle that a state has exclusive authority over its territory and the activities within it — was developed in an era when the most consequential activities within a territory occurred physically within it. The factory, the financial institution, the communications infrastructure, the administrative apparatus of governance — all were physically located within the territory and therefore physically subject to the sovereign's authority. Digital infrastructure has changed this in ways that the traditional concept of sovereignty cannot fully accommodate.
The cloud infrastructure that stores a state's most sensitive data may be physically located in a foreign jurisdiction and operated by a foreign company subject to that jurisdiction's laws. The communication platforms through which its citizens and institutions exchange information are operated by foreign companies whose algorithms shape public discourse in ways that no territorial authority controls. The financial infrastructure that processes its economic transactions runs on protocols developed and governed by actors outside its territorial authority. The state retains formal sovereignty over its territory but has lost practical control over significant dimensions of the economic and social activity that occurs within it.
Digital Sovereignty Strategies
States pursuing digital sovereignty — the meaningful assertion of territorial authority over digital infrastructure and activity — have developed several strategies with different cost-benefit profiles. Data localisation — requiring that data about a state's residents be stored on infrastructure physically located within the state — provides the most direct form of territorial control but imposes significant costs on the efficiency of data processing and creates compliance burdens for international companies. Indigenous infrastructure development — the state investment in domestically-owned cloud, semiconductor, and communications infrastructure — provides more durable sovereignty but requires massive long-term investment and produces infrastructure that is likely to be less efficient than the global alternatives for years.
Digital sovereignty is not the same as analogue sovereignty. The state that controls its territory does not thereby control the digital infrastructure through which most of its consequential economic and social activity now occurs. Achieving genuine sovereignty in the digital domain requires investments, regulatory interventions, and international negotiations that traditional sovereignty doctrine provides no guidance for.
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