Digital Sovereignty Diplomacy: Structural Challenges For Small States In The Technological Era – Analysis

December 3, 2025 
IFIMES
By Amb. Assoc. Prof. Dr. Arben Cici

In the past decade, the concept of digital sovereignty has become one of the most debated and contested themes in contemporary foreign policy, challenging classical models of state authority. In a world where power is no longer solely territorial but increasingly infrastructural, technological, and algorithmic, states face the paradox of a digital space that belongs simultaneously to everyone and to no one. While traditional diplomacy operates through well-defined borders, the internet and global data ecosystems evolve beyond jurisdiction, making national control an increasingly elusive objective.

Within this context, digital sovereignty is not merely an issue of domestic regulation; it is a strategic dimension of foreign policy in which states attempt to safeguard their technological autonomy in a global arena dominated by transnational corporations, international standards designed by major powers, and infrastructural architectures that often lie outside their direct control.

1. Technological Dependence and the Global Architecture of Critical Infrastructures Controlled by Foreign Actors

The global digital infrastructure, from intercontinental submarine cables to 5G networks, data centers, and cloud services, is built and governed by a limited number of powerful transnational corporations. For small states, this concentrated control creates a multidimensional dependence:technical (ownership and design of technology),
financial (costs of access and maintenance), and
political (strategic influence exercised by corporations and their states of origin).

Most small states, including those in the Western Balkans, lack the financial resources and technical expertise to develop sustainable domestic alternatives. Building an advanced data center or a secure national cloud infrastructure requires investment and specialized know-how that exceed the capacity of many small economies (UNCTAD, 2021). As a result, they become “strategic consumers” of global technologies, negotiating terms of access, security, and interoperability within systems whose rules they do not set.

For Albania and similar states, this poses a fundamental dilemma: how can a country preserve domestic control over its digital ecosystem when the technical backbone lies outside its jurisdiction?


2. Global Standardization as a Form of Structural Power: The “Invisible Tyrannies” of the Digital Age

International standards, protocols, data formats, security architectures, and interoperability requirements are far more than technical guidelines; they are mechanisms of structural power in the digital order. These standards determine not only how the internet operates, but also the shape of digital space and the boundaries of national sovereignty.

Small states rarely participate in the early stages of standard-setting, where the real negotiation of technological power occurs. Consequently, they must adopt standards formulated by the United States, China, the European Union, or major technology companies, otherwise they risk exclusion from the global digital economy.

Even the EU, despite its regulatory power, often faces constraints and delays because many foundational digital standards originate from U.S. Big Tech. This means that even major actors depend on private companies, while small states depend on them even more profoundly.

Thus, the “tyranny of standards” translates into operational dependency, high transition costs, and structural disadvantages for small states, which often face only two options: accept the standards or fall out of the global system.

3. Cross-Border Data Flows and the Weakening of National Jurisdiction: Sovereignty in the Age of Digital Extraterritoriality

In an interconnected digital world, data travels across borders at accelerated and decentralized rates. Yet the laws governing these flows are asymmetrical, with larger states applying extraterritorial jurisdiction that grants them access to data stored beyond their physical territory.

Legislation such as the U.S. CLOUD Act, and comparable frameworks in China and India, creates a reality in which the physical location of a server no longer defines legal control. This challenges the classical principle of territorial sovereignty. For small states, this means diminished capacity to control the data of their citizens and institutions, particularly when cloud infrastructures are foreign-owned.

The result is a tension between the national interest in security and autonomy and the economic need for interoperability, investment, and technological integration.

Albania, like many small states, stands precisely between these pressures: seeking normative sovereignty while simultaneously requiring access to global data networks.

4. Global Supply Chains in Advanced Technologies: Structural Fragility and the Risk of Falling Behind

Advanced technologies, microchips, optical equipment, sensors, high-performance servers, are produced through geographically dispersed supply chains involving hundreds of suppliers. Even major powers such as the United States and China do not control the entire production cycle.

For small states, this reality means technological autarky is impossible. Security of supply depends on geopolitical dynamics, and delays in access to advanced technologies can generate irreversible developmental gaps.

If a small state cannot access next-generation equipment, such as advanced 5G modules, it cannot develop the economic and security services of the future, effectively positioning itself on the periphery of the global digital economy.

5. The Gap Between Technological Innovation and Diplomatic-Regulatory Capacity: The Dilemmas of Openness and Closure

The rapid growth of artificial intelligence, autonomous systems, simulation technologies, and advanced data analytics is surpassing the regulatory capacities of most states. Small states, with more limited administrations and technical expertise, are particularly exposed.

They face a structural dilemma:If they close their systems, they risk technological backwardness and exclusion from global competition.
If they open without safeguards, they become vulnerable to external influence, data extraction, and strategic dependency.

This persistent gap between innovation and regulation is generating a new geopolitical asymmetry in which small states are more often policy-takers than policy-shapers—a condition that reduces their influence in technological diplomacy.

6. The Technological Diplomacy of Small States: Between Strategic Survival and Projection of Influence

In the digital era, diplomacy is no longer solely political negotiation; it requires engagement in technical forums, participation in standard-setting organizations, and the building of alliances around emerging technologies. Small states such as Albania can gain disproportionate influence by specializing in selected fields (e.g., cyber security), taking leadership roles in regional initiatives, and coordinating their positions within multilateral frameworks such as NATO and the EU.

The Baltic model, Estonia, Latvia, Lithuania, demonstrates that small states can become significant actors in digital diplomacy if they invest in technical capacity and pursue clear, long-term digital transformation strategies.
7. Digital Sovereignty for Small States: Strategies of Resilience and Alternative Governance Models

Digital sovereignty is not only about technical protection; it is the capacity of a state to exercise political, legal, and economic control over the systems that sustain society. For small states, the challenge lies in developing national cyber-security strategies, public digital platforms, open-source governance models, and shared regional infrastructures for data management.

For Albania and the Western Balkans, such an approach could increase technological autonomy, reduce dependency on external networks, and create a new area of regional cooperation, potentially evolving into a “Western Balkans Digital Commons.”
Foreign Policy as a Tool for Reclaiming Sovereignty

While the classical notion of absolute sovereignty has become practically unattainable in an interconnected digital era, states can still construct a form of strategic sovereignty that does not aspire to isolation, but rather to building the capacity to exert effective control over critical sectors. This new form of sovereignty is shaped through technological diplomacy, targeted investment, and smart regulation, allowing even small states to project influence beyond their traditional geopolitical weight. In this sense, foreign policy becomes the primary instrument for reducing structural dependencies and preserving functional autonomy within a technologically fragmented international order.

1. Technological Diplomacy and Thematic Alliances

Just as NATO’s collective security architecture underpinned the Euro-Atlantic order in the industrial age, digital power today requires new forms of cooperation, because no state, even major powers, can guarantee technological security in isolation. Technological diplomacy extends the domain of classical diplomacy: negotiations increasingly concern AI standards, cross-border data flows, cybersecurity protocols, and the governance of global platforms, not only borders, trade, or defense.

For small states, which often formulate foreign policy under conditions of limited institutional and technical capacity, thematic alliances function as a force multiplier. By joining regional blocs, such states gain negotiating power they would not possess individually. This explains why the European Union has become one of the most influential actors in technological diplomacy: despite internal diversity, its member states, some of them very small, such as Estonia, Finland, or Ireland, exercise disproportionate influence in areas like cybersecurity, digital governance, and international standard-setting.

For countries such as Albania, active participation in international forums, NATO’s Cooperative Cyber Defence Centre of Excellence, the European Union Agency for Cybersecurity (ENISA), ISO/IEC standard committees, is the most effective way to contribute to rule-making processes. Thus, thematic diplomacy requires a shift from a reactive posture to a proactive one, in which the state not only adapts but also shapes the digital global environment.

2. Investing in Key Points of Technological Autonomy

In a world where technological development outpaces the budgetary capacities of most states, the smart strategy is not to build everything, but to choose the right battles. Technological autonomy does not require creating a full national ecosystem—an unrealistic objective even for many advanced economies—but identifying the critical areas where the state must retain direct control.

These include:Sovereign cloud infrastructures for public and sensitive data;
Secure communications for state institutions;
Public-sector ai systems for administration, crisis management, and governance;
Strategic digital platforms that reduce dependency on foreign vendors.

Small states that have followed this model—such as Estonia with its digital government ecosystem or Iceland with its advanced data-center infrastructure—have been able to balance global integration with the protection of a sovereign core capable of resisting the vulnerabilities of extreme interdependence. Such an approach strengthens state resilience without jeopardizing openness to international cooperation, making it particularly suitable for the Western Balkans.

3. Regulation as an Instrument of Soft Power

The digital age has transformed how states exert influence. Instead of traditional tools of foreign policy, regulation has emerged as a new instrument of soft power. The European Union illustrates this transformation most clearly: through legal frameworks such as the General Data Protection Regulation (GDPR), the Digital Services Act (DSA) and the Digital Markets Act (DMA), the EU has established global standards that multinational corporations and third countries must adopt if they wish to access the European market.

These regulations create a powerful ripple effect:They increase algorithmic transparency;
Impose strict obligations regarding data protection;
Balance the dominance of digital platforms;
Extend the eu’s technological jurisdiction beyond its borders.

This regulatory model has transformed the EU into a diplomatic actor that exerts influence through norms, not only through economic strength or military power. For small states, adopting or aligning with such frameworks is not merely a matter of harmonization: it is a strategy to keep pace with global developments, protect citizens’ rights, and enhance their international credibility.

4. Human Capital as the Foundation of Sovereignty

Ultimately, digital sovereignty is not defined by networks, servers, or protocols—but by the people who know how to build, manage, and secure them. Technological sovereignty requires a new class of experts in:Artificial intelligence;
Cybersecurity and digital forensics;
International standardization;
Technological law and ethics;
Data-driven diplomacy;
Responsibility and accountability.

Without strong human capital, regulation remains formal, strategy remains theoretical, and technological diplomacy remains symbolic. For small states, investing in scientific education, innovation laboratories, digital diplomacy training, and international exchange programs is the most sustainable means of reclaiming control. This is why many successful small economies—such as Estonia, Israel, and Singapore—place human capital at the center of both their development strategies and their foreign-policy agendas.
Conclusions for Foreign Policy

The analysis of digital sovereignty challenges demonstrates that twenty-first-century foreign policy is shifting away from traditional diplomacy toward a more complex architecture in which technological infrastructures, global standards, data flows, and regulatory capacities are deeply interconnected. For small states—including Albania and those of the Western Balkans—these dynamics generate not only structural vulnerabilities but also new opportunities for strategic positioning, provided they develop technical expertise, build multilateral alliances, and specialize in areas where they can project influence beyond their demographic or economic weight.

In a global system defined by intensifying technological competition among major powers, small states must move from defensive postures to a proactive diplomacy of digital sovereignty. Participation in international standard-setting bodies, regional cohesion, investments in cyber-security, and alignment with EU and NATO frameworks become essential instruments of empowerment. This suggests that the future of foreign policy will no longer be determined solely by classical geopolitical relations but increasingly by the ability of states to preserve technological autonomy and to build resilient architectures of digital governance that secure development, integration, and long-term stability in the international order.

In this sense, diplomacy in the twenty-first century is not only the art of negotiation, but also the art of knowledge, where national expertise becomes an essential resource for defending state interests and strengthening strategic autonomy.

About the author: Ambassador Assoc. Prof. Dr. Arben Cici, currently lecturer of International Relations at Mediterranean University of Albania, former Ambassador of Albania to Denmark, Croatia, Russia, twice Advisor for the Foreign Policy of the President of the Republic, twice Director of the State Protocol at the Ministry of foreign Affairs, author of the Official Ceremonial of the Republic of Albania, analyst and excellent expert on the foreign policy.

The views expressed in this article are the author’s own and do not necessarily reflect IFIMES official position.

IFIMES

IFIMES – International Institute for Middle-East and Balkan studies, based in Ljubljana, Slovenia, has special consultative status with the Economic and Social Council ECOSOC/UN since 2018. IFIMES is also the publisher of the biannual international scientific journal European Perspectives. IFIMES gathers and selects various information and sources on key conflict areas in the world. The Institute analyses mutual relations among parties with an aim to promote the importance of reconciliation, early prevention/preventive diplomacy and disarmament/ confidence building measures in the regional or global conflict resolution of the existing conflicts and the role of preventive actions against new global disputes.