From Technological Revolution to Sovereignty Revolution

“The greatest changes in history do not occur when humanity discovers new technology, but when technology shifts to the centre of power.” - Batara Maju Simatupang

The history of economic development shows that every technological revolution always alters the structure of economic power and the state’s capacity to manage development. Entering the 21st century, the world faces a new phase where data, artificial intelligence (AI), machine learning, and algorithms are developing into the primary infrastructure of the digital economy.

However, the change occurring is not merely the digitalisation of economic activity, but a shift in the decision-making mechanism, which increasingly depends on algorithmic systems. Thus, the digital economy can no longer be understood solely as a technological transformation, but as a change to the architecture of power underpinning the modern economic system.

The urgency of this change becomes even more apparent when placed within the dynamics of the global economy. Zeberg’s analysis (2026) indicates that the world economy is moving towards a late-cycle slowdown phase, marked by increasing geopolitical fragmentation, a slowdown in international trade, and a deteriorating global business cycle.

Digital transformation is taking place concurrently with rising macroeconomic uncertainty, making the state’s ability to control the digital decision-making process a crucial part of the strategy to maintain national stability. In this context, Digital Financial Sovereignty is not only a response to technological developments but also to the changing strategic environment of the global economy.

As explained by Frank Pasquale (2015) in The Black Box Society, digital transformation not only gives birth to a data-driven economy but also forms a black box society, an order where important decisions are increasingly controlled by algorithms that are opaque and difficult to hold accountable.

The popular view that data is the new oil indeed affirms the importance of data as an economic asset. However, the true strategic value lies not in the data itself, but in the algorithm’s ability to transform data into judgement, which then produces a decision.

In the digital economy, the source of power no longer stems solely from the ownership of information, but from the ability to control the algorithmic mechanisms that determine how information is translated into economic and social decisions.

This article argues that the world is undergoing a more fundamental shift, from data ownership towards decision architecture. This shift gives rise to what is termed here as the algorithmic economy, an order where the ability to build judgement through algorithms becomes the main source of economic advantage as well as a new source of state power.

When algorithms determine credit risk assessments, market behaviour, financing access, and even financial system supervision, the relationship between the state, the market, and society also changes. Therefore, digital transformation is no longer just a technological modernisation project, but a transformation of the legitimacy structure of public decision-making.

Decision Sovereignty

The state fundamentally exercises its sovereignty through decisions that possess legitimacy. The constitution gains meaning when it is translated into policy, regulation, and administrative action. Therefore, changes in how decisions are produced will ultimately affect how the state exercises its sovereignty.

Every decision begins with a judgement. A judge evaluates evidence before delivering a verdict. A central bank assesses macroeconomic conditions before setting the direction of interest rates. A regulator evaluates risk before establishing policy. Thus, the quality of a decision never surpasses the quality of the judgement that produced it.

The digital revolution is changing this starting point. Artificial Intelligence not only accelerates analysis but also shapes judgement through credit scoring, fraud detection, and machine learning. From Pasquale’s (2015) perspective, algorithms have evolved into secret judgements of software, systems that produce important decisions through processes increasingly closed to public scrutiny.

Because of this, the state’s challenge is not only to ensure the efficient use of AI but also to maintain that constitutional legitimacy remains the foundation for every decision produced through digital technology.

This is where the article introduces the concept of Decision Sovereignty. This concept does not concern the state’s right to make decisions, but rather the state’s ability to maintain legitimacy over decisions that are increasingly shaped by algorithm-based judgement processes.

The main question is no longer whether AI can make decisions, but how the state ensures that these decisions remain within the framework of the constitution, the law, and the public interest.

Institutions as the Infrastructure of Sovereignty

If judgement changes, then decisions and legitimacy also change. The next question is who ensures that this legitimacy endures. The answer is not data or algorithms, but institutions.

Institutions are the mechanisms that connect state power with the public interest through a set of rules, procedures, and accountability mechanisms. History shows that technology almost always develops faster than