Europe’s Digital Sovereignty: An International Political Economy Conceptual Approach

Abstract

This paper looks at conceptual approaches to digital sovereignty from an international political economy perspective, focusing on the state level. We consider the implications of the rise of the data economy and analyze different economic policy approaches to restoring and preserving Europe's digital sovereignty from market liberal and industrial policy perspectives. We conclude that networked sovereignty can optimally be attained by supporting the emergence and success of homegrown technology companies in a globalized data economy. Digital sovereignty can best be achieved by policy makers using a mix of market liberal and more proactive industrial policy instruments. The liberal focus on framework conditions is useful in refocusing policy makers' efforts on deepening the EU single market, while the industrial policy approach can be a suitable way of funding pilot projects in early-stage technology areas in partnership with industry and setting rules for newly emerging markets. State action is also necessary to avoid monopolies.