Harnessing Digital Federation Platforms and Data Cooperatives to Empower SMEs and Local Small Communities

Digital resources and capabilities are concentrated due to network effects and economies of scale, limiting equitable digital entrepreneurship and job creation, particularly in local communities through small and medium enterprises (SMEs). In response, this policy brief advocates for the establishment of data cooperatives to ensure sovereign data exchange, promote digital entrepreneurship, protect digital rights, and contribute to community well-being. In the post- pandemic era, community and/or SME-led cooperatives can secure decentralised supply chains, supporting digital commons and data sovereignty. Through such cooperatives, communities can access affordable information and collectively negotiate data- related decisions, supporting self- determination in an AI-driven world. This brief presents diverse case studies demonstrating the transformative potential of data cooperatives across sectors worldwide. It proposes a framework for a digitally federated and sovereign architecture, providing a blueprint for achieving the Sustainable Development Goals. It concludes with six key policy recommendations for the G20 to foster inclusive and sustainable digital ecosystems.