The rapid spread of false information through social media could "wreak havoc" for businesses, global markets and society, the World Economic Forum has warned.
Misinformation has the potential to spark panic selling of shares, or panic evacuations, the WEF claimed in an analysis of the most serious risks facing the global economy published in the run-up to its meeting in Davos this month.
The rapid spread of false information, or "digital wildfires", is one of a series of newly emerging risks identified by the WEF in its Global Risks 2013 report, which surveyed 1,000 experts and business leaders.
“An analogy here is shouting 'Fire' in a crowded movie theatre. You might be able to correct that within a couple of minutes by saying 'There isn’t a fire', but in that couple of minutes, maybe a couple of people got trampled,” said John Drzik, chief executive officer of Oliver Wyman Group, and one of the report’s editors.
Social media increasing risk of false information
The report warned the risks of false information were increasing as the use of social media accelerates. More than 500 million people have signed up to Twitter, and one billion to Facebook in less than decade.
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There have been several incidents over the past 12 months, where false information transmitted on the internet, or by text message, has had serious consequences, according to the report.
A fake tweet by a user impersonating the Russian interior minister, alleging that the Syrian president had been killed or injured, caused crude prices to rise by over $1 before traders realised the news was false.
In Assam, 30,000 people fled the technology centre in Bangalore in panic after receiving false text messages that they were at risk of attack.
And the Nasdaq halted trading on Google shares after a leaked report triggered a $22bn plunge in Google’s market capitalisation.
Addressing global risks
Although policing the internet is impractical, technology could play a role in assessing the accuracy of information on social media, the World Economic Forum suggested.
Researchers are developing software, for example, that can be used in browsers to help people assess the credibility of online information and sources.
The rapid spread of false information, or "digital wildfires", is one of a series of newly emerging risks identified by the WEF
“Certain sites could get reliability ratings created by users, much as you have ratings on the internet of movies or restaurants,” said Drzik.
The report identified widening wealth gaps, chronic fiscal imbalances, and the failure to adapt to climate change as the three most prevalent risks to the global economy over the next 10 years.
“These global risks are essentially a health warning regarding our most critical systems. National resilience to global risks needs to be a priority so that critical systems need to function,” said Lee Howell, the report’s overall editor.
Other emerging risks include the threat of simultaneous economic and environmental shocks, and the risks of viruses and bacteria becoming immune to antibiotics.
More unusual threats identified by the WEF include runaway climate change, the risks of geo-engineering running out of control, and the discovery of alien life.
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