Digital disruption has undermined economic policy settings in Australia to the point where it could take up to a decade to make them fit-for-purpose again, the Business Council of Australia has warned.
The council's president Catherine Livingstone - who is also Telstra's chairman - told the National Press Club in Canberra that many traditional policy settings "have exceeded their design tolerance limits" as they are disrupted by digital change.
Such disruption, she said, had implications for "our reliance on the traditional [economic] growth tenets of productivity, participation and population" - collectively known as the 3Ps.
"If we are to adapt to these disruptive forces, we must do more than rely on the simplistic exhortations to focus on productivity, participation and population as the route to growth," Livingstone said.
She urged government, the unions and business to come together to drive philosophical and policy reform, noting it was "difficult to convey the level of anxiety and urgency we should have in the face of [digitally] disruptive forces."
"The ageing of our population combined with the impact of hyper-connectivity will literally overwhelm us if we don't rapidly increase our rate of adaptation," she warned.
"If we embark on a ten-year transition now, we might just have policy frameworks fit for purpose by 2025. If we do not, we face the certain loss of standard of living and social cohesion."
Detail behind disruption
Livingstone said current thinking around the 3Ps displayed "our lack of nuance, lack of sophistication, lack of granularity and lack of context in policy design".
Such shortfalls in the thinking around economic growth were "letting us down", she said.
For example, productivity was inexplicably tied to innovation, according to Livingstone, and there were many moving parts in the economy that needed to align in order to foster innovation. She said it was up to "government, the union movement and business to come to a meeting of the minds" to ensure all the pieces were there to make innovation - and therefore productivity improvement - possible.
Another of the Ps - participation - required policy makers to ensure jobs actually existed in the first place. In a digitally-disrupted world, this was not guaranteed.
"We need to move urgently from a discussion about protecting the jobs of today, to creating the jobs of the future," Livingstone said.
"This includes ensuring that there is a workforce skilled in the attributes required by business.
"There is no more disturbing evidence of the potential dislocating effects of the disruptive forces than the fact that we now sit with around 400,000 young people neither in work nor full-time study.
"This would suggest that it's not a participation problem, but a jobs and skills match problem we have on our hands."
Livingstone believed that reformatting a select few areas of public policy - including health and education - could "have a catalytic effect on our capacity to respond to the forces of disruption".
"If we manage these properly, with the required degree of policy granularity and design sophistication, our productivity, the contribution of population growth and our capacity to increase participation will [also] dramatically improve," she said.
Health policy, she said, needed to shift from a mindset "of fixing people when they are sick, to enabling them to stay healthy for as long as possible". This reflects the direction health practitioners also recommend taking.
Likewise, education policy needed its own shake-up.
"We must move away from the notion that work is something we begin after a long period of study, to one where work is integrated with learning," Livingstone said.
"Here, the philosophical shift is to move from a system which has a rigid discontinuity between education and work, to one which is more of a continuum, enabling simultaneous engagement in education and work for all from Year 11.
"Coupled with this philosophical shift would be a more explicit recognition of the stock of skills intrinsic to employability."
Livingstone said that the policy setting changes she was suggesting would require "extraordinary levels of leadership from government, business and the community".
However, in the first instance, that leadership had to come "from our elected representatives".
She was particularly concerned with the short-term thinking that has pervaded recent federal governments and sought a bi-partisan commitment to longer term thinking for the benefit of Australia.
"We need to see that the personal priorities and values of our elected representatives are congruent with what is truly in the national interest, not in their personal interest in being re-elected," Livingstone said.
"[Our] leaders must lead the conversation on why we need to adapt through a new social contract, and they must frame the transition path over the next decade.
"The community is absolutely ready for this conversation."