Investing in Media Literacy and Local Journalism as a Long-Term Hedge Against Disinformation Risk

In an era where disinformation spreads faster than truth, institutional investors are increasingly recognizing the value of societal resilience as a strategic asset. The erosion of public trust in media-now at historic lows in the U.S., with only 28% of Americans expressing confidence in the mass media according to Gallup-has created a vacuum that disinformation campaigns exploit with alarming efficiency. Yet, amid this crisis, two pillars stand out as potential long-term hedges: media literacy and local journalism. These are not just cultural or civic priorities; they are investments in the infrastructure of democratic trust, with measurable returns in reducing disinformation risk and stabilizing public discourse.

The ROI of Media Literacy: A Data-Driven Defense

Media literacy programs have demonstrated tangible outcomes in improving the public's ability to discern credible information. A 2024 study found that digital media literacy interventions increased the ability to distinguish between true and false news by 26.5% in the U.S. and 17.5% in India, with effects persisting weeks later. Similarly, targeted media literacy tips-designed to foster both skepticism toward falsehoods and trust in verified news-showed a dual impact: reducing the sharing of false news while increasing the acceptance of true stories. These results underscore a critical insight: media literacy is not merely an educational tool but a scalable defense mechanism against disinformation.

The European Union's EUvsDisinfo project, though critiqued for underfunding and fragmented coordination, offers a blueprint for institutional action. By cataloging over 15,000 disinformation cases and partnering with civil society to promote media literacy, the initiative has become a cornerstone of the EU's digital defense strategy. Its integration into the Digital Services Act (DSA) further highlights the potential for regulatory frameworks to amplify the impact of media literacy efforts.

Local Journalism: The Trust Anchor in a Fractured Media Landscape

While media literacy combats disinformation at the individual level, local journalism addresses its systemic roots. In regions where traditional news brands maintain strong audience connections-such as Northern Europe-public trust in journalism remains significantly higher. This is no coincidence. Local journalism provides context, accountability, and community-specific reporting that national or global outlets often lack. It acts as a counterweight to the viral, emotionally charged narratives that dominate social media and fuel distrust.

The decline of local newsrooms, however, has exacerbated the problem. A 2025 Pew Research Center survey found that trust in national news organizations has plummeted from 76% in 2016 to 56% in 2025. Younger audiences, in particular, are skeptical of institutional media, with 84% of teens distrusting the news. Rebuilding trust requires reinvesting in local journalism-not as a nostalgic endeavor, but as a strategic move to reanchor public confidence in fact-based reporting.

Strategic Investment: Beyond Short-Term Fixes

Institutional investors must move beyond fragmented, short-term solutions like fact-checking or algorithmic content moderation. While these tools have their place, they are reactive and insufficient against the sophistication of modern disinformation campaigns. Instead, a holistic approach is needed-one that combines sustained funding for media literacy education, support for local journalism, and policy reforms to hold platforms accountable.

The World Economic Forum's proposed ecosystem model for media and information literacy (MIL) offers a framework for such an approach. By integrating MIL into education systems, workplaces, and digital platforms, institutions can create a "whole-of-society" defense against disinformation. This model also emphasizes addressing gaps in adult and lifelong learning, a critical oversight in current initiatives.

The Path Forward: A Call for Coordinated Action

The evidence is clear: investing in media literacy and local journalism yields measurable returns in reducing disinformation risk and stabilizing public trust. Yet, success depends on coordination. The EU's experience with EUvsDisinfo shows that even well-intentioned programs falter without adequate funding and cross-sector collaboration. Similarly, the U.S. must confront the structural decline of local newsrooms, which has left communities vulnerable to misinformation.

For institutional investors, the imperative is twofold: first, to allocate capital toward scalable media literacy programs and local journalism ventures; and second, to advocate for policies that enforce platform accountability and fund public media. The cost of inaction-measured in societal instability, economic disruption, and democratic erosion-is far greater than the cost of investment.

In the long run, the most resilient institutions will be those that recognize media literacy and local journalism not as expenses, but as foundational investments in the future of trust itself.