Small States, Big Stakes: Reframing Digital Sovereignty for the Many

By Emrys Schoemaker and Tom Kirk - 18 November 2025

Small States, Big Stakes: Reframing Digital Sovereignty for the Many

If the last century’s struggle was over who controls information, Emrys Schoemaker and Tom Kirk argue that the next may be over who controls the infrastructures of trust.

As leaders of the European Union meet together in Berlin for the Summit on European Digital Sovereignty, the focus will be on reducing European technological dependencies and increasing global competitiveness. Yet while the focus will be on Europe as a large regional bloc, the question of sovereignty is increasingly important for small states too.

Small states - constitute the majority of countries in the world - 51% (99 of 193) of members of the United Nations have a population of 10 million or less. And for Europe, small neighbouring states are critical to the future trajectory of the Union’s resilience and competitiveness. Small states matter - and digital sovereignty is increasingly an ambition for them.

Consider Switzerland. When Amazon Web Services experienced a 15-hour outage on October 20, disrupting services from Snapchat to banking platforms and potentially causing hundreds of billions in economic damage, the timing was particularly sensitive for Switzerland. Just after Swiss voters narrowly approved a state-run digital identity system by a razor-thin 50.4% majority. Amazon's cloud infrastructure failure had undoubtedly exposed the fundamental tension at the heart of the Alpine nation's digital sovereignty ambitions.

Individually, these may seem like disparate events, but together, they mark a profound recognition that in a world where code, data, and infrastructure underpin nearly every dimension of statehood, sovereignty can no longer be assumed—it must be strategically re-engineered.

Switzerland’s case is instructive not because of its wealth or capability, but because of its vulnerability. If even a digitally advanced state must reclaim agency from dominant cloud providers, what does that mean for the 140-odd other small states that make up the majority of the world’s nations—many of which face far sharper asymmetries of power?

Why Small-State Digital Sovereignty Matters

The term digital sovereignty has entered global policy debates as governments grapple with how to govern their digital futures. For some - particularly in Europe - it means reducing dependency on U.S. tech giants. For others, such as China, it underpins state control of data and networks.

But for small states, digital sovereignty has a different register. It is not about geopolitical dominance or economic protectionism; it is about survival and self-determination in a deeply asymmetric system.

Digital sovereignty refers to a state, an economy, or an individual’s autonomous control over digital means and activities. Yet, scholars note that discussions often oversimplify sovereignty, whereas in reality it involves multiple levels and actors. For many small states, control over that destiny is conditioned by dependency on, among others, foreign-owned cloud providers, donor-funded digital public infrastructure, or neighboring powers’ networks.

This matters because the infrastructures of the digital state—identity systems, payment rails, data registries, and communication networks—are not neutral. They embody the norms and interests of those who design and finance them. As Chatham House warns, when digital governance marginalizes smaller states, it risks reproducing the very inequalities the internet once promised to transcend.

In other words, digital sovereignty is not simply about data localization or cybersecurity; it is about agency - the ability to shape one’s digital path amid global dependencies.

Navigating Asymmetry: Switzerland, Kosovo, Bhutan, and Lesotho

Switzerland’s digital posture provides a useful starting point for understanding how small states are reframing sovereignty. The country has invested in the ALPS AI initiative to build trusted, value-aligned artificial intelligence, by linking software development to democratic oversight and value-based governance. In short, Switzerland is experimenting with what might be called sovereignty through sophistication: using technical capability and democratic processes to assert control without isolation.

Yet the same questions echo elsewhere, under very different conditions.

In Kosovo, digital sovereignty is tied to both aspiration and defense. As an EU accession candidate with contested international recognition, Kosovo’s embrace of digital transformation is part of a larger project of statehood. By aligning with the EU’s Digital Europe Programme, the country signals its commitment to European norms while building administrative capacity. For Kosovo, digital sovereignty is both a pathway to integration and a shield against interference, illustrating how sovereignty can be instrumentalized as diplomacy. Yet dependence on foreign technology and regional connectivity, especially with Serbia, exposes its fragility.

Further east, Bhutan offers another story. Wedged between India and China, the Himalayan kingdom’s innovative use of hydropower to fuel cryptocurrency mining operations represents small state ingenuity at its finest. This strategy serves multiple sovereignty purposes: generating foreign exchange without extensive market access, building blockchain expertise applicable to other domains, and creating revenue streams independent of traditional aid or trade arrangements. But this digital innovation coexists with fundamental infrastructure dependence, all of Bhutan's internet connectivity routes through India, creating vulnerabilities no amount of cryptocurrency can address.

Across the Indian Ocean, Lesotho faces yet another asymmetry: complete geographic encirclement by South Africa. The kingdom’s National Digital Transformation Strategy 2024–2030 recognizes that while integration with South African networks is unavoidable, autonomy can still be built through data-governance frameworks, digital-skills investment, and regional partnerships. Lesotho’s experience underscores a recurring truth: for small states, sovereignty is less about isolation and more about negotiated interdependence - finding degrees of freedom within constraint.

Taken together, these stories point to la pattern. Digital sovereignty for small states is not a binary condition but a spectrum of strategies - technical, diplomatic, and cultural - through which autonomy is continuously enacted and contested.

Strategic Approaches and Collective Action

These varied experiences suggest several strategic approaches for small state digital sovereignty.

First, selectivity is essential. Small states cannot achieve comprehensive digital independence and must strategically choose where to assert sovereignty versus accepting managed dependencies. Switzerland's focus on AI and digital identity, Kosovo's emphasis on e-governance, and Bhutan's cryptocurrency strategy all represent deliberate choices about where to concentrate limited resources. As sovereignty is increasingly framed through a ‘stack’, selecting where in the ‘stack’ to focus on strengthening sovereignty is critical.

Second, regulatory alignment can paradoxically enhance sovereignty when strategically deployed. Kosovo's voluntary adoption of EU standards before membership and Switzerland's selective harmonization with international frameworks show how small states can leverage larger governance systems for protection and legitimacy while maintaining autonomy in critical areas. Governance - and particularly governance for interoperability - is a critical enabler of sovereignty.

Third, innovative resource deployment can create unexpected sovereignty opportunities. Bhutan's hydropower-to-cryptocurrency pathway demonstrates how traditional assets can be reimagined for digital independence. Small states' agility may allow them to exploit niches that larger powers overlook or cannot efficiently pursue.

Fourth, collective action among small states could amplify individual efforts. The Small Island Developing States (SIDS) partnership offers a potential model: pooling resources for shared infrastructure, jointly negotiating with tech providers, and developing common standards tailored to small state needs. A similar approach for digital sovereignty could help small states achieve economies of scale while maintaining independence from both Big Tech and larger neighbors.

From Vulnerability to Voice

Small states are not passive actors in the digital order. They innovate, adapt, and form coalitions. Yet their perspectives are often missing from debates dominated by the EU, U.S., and China. In the 1970s, small and non-aligned states launched the New World Information and Communication Order (NWICO) to challenge Western dominance of media flows. While the effort faltered, its spirit remains relevant. Today’s equivalent is a digital landscape where cloud architectures, AI models, and data centers are controlled by a handful of corporations and countries.

A renewed coalition of small states, perhaps modeled on the Small Island Developing States (SIDS) grouping, could become a non-aligned movement for digital sovereignty. By pooling expertise, coordinating procurement, and negotiating collectively with major providers, small states could turn structural vulnerability into collective leverage. As the Brookings Institution notes, “the geopolitics of AI and digital infrastructure are reshaping how sovereignty and security are defined.” Without concerted small-state participation, the emerging digital order risks entrenching dependency rather than distributing power.

A Polycentric Future

Supporting small states to understand their needs and articulate coherent digital-sovereignty strategies is not charity - it is geopolitical necessity. In an era of fragmenting multilateralism, their ability to maintain agency contributes directly to a more resilient global system.

As Peter Timmers of TNO argues, digital sovereignty requires bridging the gaps between national control and global interoperability. That bridging role is precisely where small states excel: their survival depends on navigating interdependence rather than denying it.

A truly polycentric digital order - resilient to geopolitical fragmentation - will emerge only if the experiences of small states are brought to the center of global governance debates. They remind us that sovereignty is relational, not absolute; it is built through negotiation, cooperation, and continuous adaptation.

From the Alps to the Himalayas to the Lesotho Highlands, small states are showing what it means to exercise agency in a system tilted against them. Their experiments, technical, political, and ethical, hold lessons not just for themselves, but for everyone seeking to build a more just and plural digital world.