Riskology by Infortal Episode 19: Davos & Disinformation

Companies operating in today’s global economy face a multitude of risks, including the growing threat of misinformation and disinformation. In this episode of the Riskology Podcast, Dr. Ian Oxnevad and Chris Mason delve into the topic of misinformation and disinformation through the lens of the recent Davos conference. They explore the impact of these risks on businesses, the importance of active defense strategies, and the need for companies to be prepared to counter disinformation campaigns. With the evolving geopolitical landscape, it is crucial for companies to understand and navigate these risks to protect their bottom line and reputation.

Infortal Worldwide is a global risk management and investigation firm that specializes in helping businesses navigate complex risk landscapes. The company’s focus extends to various areas, including economics, politics, and geopolitical risk. By delving into these interconnected realms, Infortal Worldwide aims to provide clients with comprehensive insights that empower them to make informed decisions, especially in critical areas such as mergers and acquisitions, private equity investments, and other strategic moves.

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Welcome back to another episode of Riskology by Infortal(TM). This is where we combine the worlds of business, finance, intelligence and geopolitics to help you understand how the real world affects your bottom line. 

So today we have kind of a hot topic, misinformation and disinformation. Chris, why don't you tell us a little bit about this?  There’s a lot of buzz lately. 

Chris Mason:

Yeah, definitely. And don't forget, the context today is looking at disinformation and misinformation through the lens of Davos, as it was such a major topic for this round. 

It's definitely something that you and I have looked at very closely with all of the emerging technology and tools, particularly in the AI space. But what was interesting to see, and I believe it's still available on the World Economic Forum website, in terms of key risks, key fundamental risks to look at over a two year horizon: misinformation, disinformation is the number one risk looking at a two year horizon. Once you extend the horizon, it starts to drop down that list. But for the next couple of years, it's really highlighted as a key, or the key risk. What are your thoughts about that Ian? 

Ian Oxnevad:

Ian well, it's interesting that this is a two year risk as opposed to a ten year risk, because this really stood out to me.  Because disinformation and misinformation are not going to go away as problems. They're still going to be here ten years from now. It's now because of social media. It's just going to be a fact of everyday life for media consumers and policymakers and investors, kind of regardless of whatever happens over the next ten years. And you kind of have to put this in context of the elections. 

This is the year of the election. We have, I think Mexico, the US, of course, the UK, India, Indonesia, and a few other major elections going on around the world. Even Russia is having an election, for what that's worth. Now, if you think about the next two years, it's clear that this sort of misinformation risk is in the context of that wave of elections. 


I think that's so right. I think it was like there's statistics everywhere on these elections, but somewhere in the realm of a billion people are heading to the polls this year. 

And I think it's so worrying because of the immediate impact that we've seen with AI tools that are essentially readily available to almost anyone. And in a way, it's a superpower in the world of misinformation and disinformation, which as you know, we've seen it here in the US. It can absolutely impact elections. 

But before we even dive deeper, one of the things that sometimes comes up throughout these conversations is what is the actual difference between misinformation and disinformation? 


Okay, so this is a big question because disinformation they're both phenomenon. First of all, they're not unique to this era of social media. They've been around for well over 100 years as concepts. But disinformation is the deliberate lying to create or sway a population, to basically sway a population the way you want. 

In contrast, misinformation is simply inaccurate information that kind of just happens organically. Kind of like the game of telephone, where you could say, Richard is walking into the store, and you just use that simple phrase, and then by the time you get down 30 people in the line of telephone, it's going to start rating bananas and we're all going to die. 


Yeah, and then once you send that through social media platforms, it's not just 10 or 20 people, we're talking about thousands, even millions of people, where this information can just bring on a life of its own. 


Authoritarians especially, or any authoritarian impetus or movement has a motivation to use disinformation. Disinformatsia is what the Russians used to call it. But this used to be a staple of Russian intelligence operations going back 100 years to the Soviet period. And this was an era where you had authoritarian regimes of different stripes, basically perfecting the art of propaganda. Propaganda has always been around, but these were actually regimes that studied this. 

And disinformatsia, or disinformation, is that deliberate use of misinformation. And you kind of have to bring in two other things here, because disinformation, it's not usually in isolation, it's usually over time. So the Russians sort of came up with this idea, or at least conceptualized it. But you kind of think of Joseph Goebbels with the Nazis, where if you create a big enough lie, you repeat it over and over and over again. Pretty soon you own that narrative, even though that narrative is based on absolutely nothing, but maybe a couple of adjacent kernels of truth, but yet a whole population can buy into it. 

So that's kind of the risk that disinformation poses. 


It's interesting that something that we used to think about at the nation state level, in terms of times of war, times of significant world change, that's really where this stuff would sit before, and it would require massive operations, huge undertakings to sort of run disinformation campaigns.

I think,  what's striking now, with all of the technology that's available, is how easy it is for even single actors, small groups, who are able to tap into these resources to run their own campaigns. One of the things we like to focus on here, of course, is looking at how these types of issues can impact businesses here in the US. 

What are your thoughts there in terms of looking at markets and how disinformation can impact markets? 


Disinformation can have or misinformation. Either one can have a massive impact on markets or even a business's reputation. So if you think about the Mandela effect, the Mandela effect is this psychological phenomenon where you basically have a mass false memory. So in 2009, there was a journalist who discovered that a whole lot of people at this conference had thought Nelson Mandela died in prison under apartheid in the 1980s. And obviously that's not true. 

He went on to be president, but somehow, and he died in, like, 2013. But somehow, those factual pieces of information were completely not picked up by this crowd. And yet it was a shared delusion among everyone. So if you apply that to a company, and that was just an organic mistake, who knows where that piece of information came from? But if you think about applying this to a company, this product causes cancer. 

Okay, well, this brand sells a lot of this product, but then maybe that product doesn't actually cause cancer.  Maybe one ingredient in a product of a subsidiary that no longer exists, of that major company, caused cancer in one instance ten years ago. But all of a sudden, that creates the illusion that this company's products cause cancer. 

Okay, that's a piece of misinformation, that that company has to fight like the Dickens to sort of change, because that can crash your stock prices, that can create a media scandal, that can lead to lawsuits, it can lead to regulatory knee jerk effects and reactions, that can change a whole industry. So it's actually pretty dangerous as a risk. 


Yeah, you know it's interesting. So we've hit elections, we've hit sort of how nations have approached this historically. Now, of course, companies can be subject to misinformation and disinformation campaigns. It’s starting to become clear why this is such a predominant risk featured by the World Economic Forum. And I was looking at a lot of the takeaways from some of the conversations and some of the press conferences that were occurring at Davos. 

And there was a lot of sort of big picture thinking, which that's very common at the World Economic Forum event held in Davos each year. 

But what I didn't hear much about, really, is how companies can prepare themselves to defend against the disinformation threats. And I think that would be good to sort of brainstorm and think through a little bit about what companies can do today to protect themselves from these types of threats. 


Well, in order to protect yourself, you kind of need, like, an active defense.  You have to be constantly aware of incoming information about perceptions related to your product, your business, your reputation, et cetera. And you kind of just have to have your ear to the ground so that if you start to hear them percolating, you can actively counter that in your press releases, in your investor reports, or if you're with a company that has a social media presence at all, you can actively combat that as it emerges, so that you can control that narrative. But that takes a lot of effort. It takes a lot of intelligence gathering, a lot of listening to online chatter, and sort of active crafting of messaging potentially to counter it. 


I think this one is complex. It's not as straightforward as even some of the cybersecurity threats, where you can contain the analysis and the mitigation within one part of the organization. It really goes across a lot of different departments, because if you think about it, no matter how strong your defenses are, a disinformation campaign can still appear suddenly. It can come out of nowhere. It can really catch you off guard. 

And really, once that happens, it becomes Ian, art of communication and public affairs in terms of how your company is planning to respond. 

So it's really good to make an assessment of what you think your vulnerabilities can be in terms of disinformation attacks and try to prepare a game plan for when this might occur, how your team can jump in and sort of figure out how to respond. 

And at the end of the day, it's really going to be a big public relations analysis and strategic response campaign, depending on the scale that you're dealing with. So it's really a lot different than some of the threats that we've seen recently from the cyber space. 


Your reactions and your countermeasures to a disinformation campaign or even just an organic misinformation crisis. You're going to be tailoring your message differently to, potentially, regulators versus investors versus employees versus just the broader public. 

And that creates an incentive to know your different audiences, to be able to have the means in place with your marketing teams to gather data and then figure out ways to sort of repair or reinforce the image that you want to portray. Politicians do this all the time. Campaigns do this I know because I helped with one that did this very thing at a race on the west coast, and it worked very well. 

But the secret was just knowing the granularity and the trends of the target population. 


Yeah, that's a really great point. And you mentioned, too, and the employees at every level really need to be aware of the threat, because one of the challenges is identifying the disinformation or misinformation threat as soon as possible. 

And so you really want to make sure that your team at every level is educated on these threats so that they can help bot these issues, so that you can, respond in the most timely fashion possible.

 But let's circle back to the list of Davos risks that they had identified for this year, because it's always interesting to see sort of what's highlighted. And I feel like we've seen a shift this year in terms of the overall tone and the discussions going on. 

So I thought maybe you could shed some light onto the overall tone of that Davos this year. 


Yeah, it seemed a little less utopian than it has in the past, and I think there's some reasons for this. So if you look at Davos, its origins actually go back to the early 1970s. 

So in 1971, Klaus Schwab, who sort of heads this thing, he was a business professor of all things. So maybe there's hope for those of us who want out of academia. But if you look at it, in the 1970s, it began as the European Management Forum, which was basically under the auspices of the European Commission, a sort of forum for business executives and others to sort of come together to talk about European business policies and market strategies and things of that nature. 

But by the mid 1970s, it began to take on this sort of reactive body, if you will, to sort of try to figure out major world problems. Because if you look at the mid 1970s, you start to have oil crises, and then ultimately you have the revolution in Iran. So you start to have these affairs affecting oil prices and macroeconomic trends. And that's sort of the origins of the World Economic Forum, was as a forum literally just to sort of have all these different actors come together and talk these things through. But I think you need to keep these origins in mind when you look at the tone of Davos, because if you look at the trends for what they see as immediate threats, you see disinformation as the number one. 

Conflict is not even the number two or number three. It's actually number five. And I think that this sort of underlies the vantage point of the World Economic forum and especially its limitations. A lot of people look to it as sort of this guiding light for different policy. But the fact of the matter is it kind of reflects a West European, sort of EU centric view of the world, where I'm not sure how connected to reality it always is, because interstate conflict is already here. 

And the fact that it's number five on the list, as opposed to number one. Russia's not that far away from Switzerland where this was taking place. I mean, Disinformatsia could be the name of a cocktail you get at the bar in Switzerland, but it's right next door. And the fact that that was number five tells me that there's sort of almost an optimism bias in the World Economic Forum that I think needs to be tempered by reality. 


Yeah, I thought that really struck out to me as well in terms of interstate conflict ranked at number five. 

If I look at what's listed in front of the interstate conflict, though, it's kind of interesting because you really could place interstate conflict at the top and have risks, number one through four cascading underneath. Because in a sense, the major risks that are listed one through four, are stemming from that conflict that's going on today, which is widening and which is why those risks are widening.  I would sort of reorder this, I think, myself, I'm a fan of the optimism that I think does come out of Davos. There's a lot of conspiracy theories that always come up when this meeting takes place, but I think it's good to have a forum where you get a little bit of a different look at some of these issues. 

I think, communication across national boundaries occurs here in these types of events that maybe doesn't otherwise happen, can have an impact down the road. So I think some of the optimism is good to see. But again, I'm surprised that interstate conflict is down at number five. 


Yeah, that's a major problem. To kind of talk to the conspiracy theory aspect of this, who knows who, many of our listeners out there may think that there's some sort of, sort of conspiracy to take over the world, but the World Economic Forum is an informal forum. It doesn't have the power of law. You do have a lot of heads of state or representatives from governments there and businesses, but there's no central coordination mechanism to any of it. It's really just a forum. 

And if you're worried about one world government, would you rather it be a formal forum as opposed to an informal one? But if you look at it.... yeah, there is an optimism to it, but I think you're right. I think that there's a disconnect based on these two year versus ten year time horizons. Interstate conflict has to be at the top. It just does, because we're potentially on the cusp of World War three. 

I hope I'm wrong. I really do. But it can't be ignored. And misinformation, the polarization, all these different things are stemming from that. These are all macro political, geopolitical and economic sort of tectonics taking place. 


Yeah, I think, honestly, a great way to kick off the year in terms of issues that are highlighted, because with disinformation and misinformation just bringing it full circle, I do think that the forum got that absolutely right, that that is one of the major issues to focus on this year. 

I think where we might like to see it sort of placed a little bit differently is maybe in the context of some of the conflicts and how the disinformation and misinformation can actually exacerbate some of the conflicts that are going on. That's a really important factor, I think, to make sure as part of any high level conversations about these risks. But again, I think the fact that it was highlighted is a positive. It does show that people are recognizing that with the technology that is emerging, this is a much more prevalent problem than it was even a year ago. 


Thank you, Chris. So that wraps up our episode for today on disinformation and Davos. 

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