As Microsoft co-founder Bill Gates framed it in 2010: “The Internet is becoming the town square of the global village of tomorrow.” By extension, social media platforms, including Facebook, Instagram, and TikTok, are the hangout spots surrounding that “town square.” 

That image is starting to come apart as countries follow the EU, the United States, and China in introducing laws limiting digital data exchange between local companies and residents with the outside world. Those policies and accompanying narratives refer to “digital sovereignty.”

“Over the past decade, the notion of digital sovereignty has emerged as a central theme in policy discussions surrounding digital issues,” according to an August 2024 policy study by the Euro-Mediterranean Study Commission, a think tank. “[It] has gained considerable importance in statecraft and international relations.”

Obstructions to the free flow of data in the digital space are impacting MENA nations. “The concept of digital sovereignty has emerged as a pivotal concern within the MENA region,” noted the policy study. “[It] underscores the necessity for nations to navigate the complexities of the digital era with autonomy and strategic foresight.”

Virtual cracks
Narratives on the benefits nations can reap from digital sovereignty are growing louder. “Security challenges … have grown significantly … including cyberattacks on critical infrastructures, sabotage and physical attacks on network infrastructures, disinformation, cyber espionage, and so on,” said the policy study.

Digital sovereignty will have a profound impact on society, as it is “more than digital technology itself, it is [unrestricted access to the digital world] that is ultimately at stake,” the policy study noted. That impacts “economic and social, commercial, industrial, defense, and security issues all at once.”

The EU’s 27 member states are leading the digital sovereignty narrative, said Kevin Korte, a member of Forbes Councils, a network of business professionals. “The Digital Markets Act, Digital Services Act, and Artificial Intelligence Act are advancing the [EU’s] idea of becoming independent from foreign tech providers. These legislative measures aim to create a more balanced digital ecosystem, where innovation thrives and citizens’ rights are protected.”

Digital sovereignty narratives are also emerging in North America. According to a February survey by B2B News Network, “78% of Canadian IT leaders refuse to house their data [in data centers] outside Canada. Likewise, 88% believe local data storage is crucial for compliance, confidentiality, and security.” Korte noted, “This shift in mindset is driving businesses to reassess their data protection strategies and explore ways to reduce their dependence on foreign technologies.”

The United States, home to the biggest and most popular digital services companies, including social media platforms, is ensuring its digital sovereignty by “accessing any and all foreign data entering or residing within its borders without a warrant,” noted Gabby Ortiz, product marketing manager at Thales Group, a cybersecurity company. These recent policy adjustments contradict protection regulations, such as the EU’s General Data Protection Regulation (GDPR), she added.

Additionally, the Cloud Act “allows U.S. law enforcement agencies to demand access to data held by U.S.-based technology companies, regardless of where that data is physically stored in the world.” Ortiz said that violates “global data sovereignty laws.” Compounding the infringement is that this data can be accessed “without notifying the data subject or foreign regulatory authority.”

The third big global player in digital sovereignty is China, whose laws require identifying local entities that collect and process data. “Per the China legal requirement, online service providers have an obligation to verify the real name of users,” Microsoft said in its data sovereignty and China regulations section. “For business entity users, a state-registered business license is required for real name verification.”

Chinese laws also cap the outflow of data “collected and generated in China from China to destinations outside China,” Microsoft said. Beyond that threshold, companies must obtain special government permission. Additionally, all websites that display information or offer services within China must register in the country.  

MENA: Toward sovereignty

The rapid development of AI should fuel the shift toward digital sovereignty. Sentiments during the seventh edition of the Global Data AI Executive Briefing held in July indicated, “As the AI arms race accelerates amid geopolitical instability, … countries [need] to ensure digital sovereignty with control over infrastructure, data and systems.”

MENA is already at the forefront of AI development, with seven of the region’s 19 countries having published AI strategies, according to the MENA AI Observatory. “The MENA region will earn $320 billion by 2030 from value added by AI, as well as experiencing an annual growth of up to 20% to 34% in economic contribution of AI across the region.”

The region is also witnessing growing geopolitical tensions in seven nations, with Qatar, Saudi Arabia, and Egypt indirectly involved as they mediate those conflicts.

Growing cybersecurity concerns in the region also drive digital sovereignty narratives. “Fast and significant digitization … within MENA societies and economies, as well as the significance of the region in global energy markets, have rendered certain MENA economies [including] Egypt, among the primary targets for advanced persistent threats in the world.”

ICT has been Egypt’s fastest-growing sector since 2020, with annual growth rates between 15% and 16%, despite economic and investment challenges. The government’s official plan is to increase the sector’s contribution to 8% of GDP by 2030, up from 5.8% in 2024.

Another reason MENA governments may consider digital sovereignty is “more than 60% of Internet users primarily rely on social media, gradually superseding traditional [local] media outlets as the primary source of information,” the policy study said.

That exposes MENA residents to an increasing amount of misinformation. Research by Gizem Ceylan, a postdoctoral scholar at Yale School of Management, found that  “by constantly reinforcing sharing — any sharing — with likes and comments, platforms have created habitual users who are largely unconcerned with the content they post. And these habitual users … spread a disproportionate share of misinformation.”

Opportunity or fantasy

On the ground, the Euro-Mediterranean Study Commission noted, “In most MENA jurisdictions … the privacy of an individual and the safeguarding of personal data are provided under general provision laws rather than [regulations] specifically focused on the issue of data privacy or data protection.”

The reason why MENA has no bespoke digital sovereignty laws or they are not fully implemented is that “data storage-related operations are usually handled by data centers and [content delivery networks] operated by foreign actors,” who adhere to their home country’s digital sovereignty laws.

The policy study said that if MENA governments were to pursue digital sovereignty seriously, they would need to align efforts. “The concept of digital sovereignty encourages the formulation of regional collaborations … aimed at standardizing digital policies, sharing technological innovations, and building collective defenses against cyber threats.”

One challenge is the significant gap in digital infrastructure strength and maturity among MENA economies. “Countries in the Gulf, notably the UAE, Qatar, Saudi Arabia, and Kuwait, have distinguished themselves through robust digital infrastructure, creating a discernible divide not only with their North African counterparts, but also with other nations within the Middle East itself,” said the policy study.  

Ultimately, too much digital sovereignty would harm the economies and societies that attempt it. “The interconnected nature of our global economy means that complete technological isolation is neither feasible nor desirable,” said Korte of Forbes.

The balanced solution would see “nations and businesses … work toward creating interoperable systems that respect sovereignty while fostering innovation and economic growth,” Korte said. “After all, no organization or country can keep pace with technological advancement in every field, which makes open collaboration essential to keep innovating.”

This article first appeared in August’s print edition of Business Monthly.