The problems facing the world - like the euro crisis and revolution in the Middle East - are all a reflection of this huge change, Tapscott told CNBC.com. This change and its impact on global events will not be solved by old ways of thinking; understanding the problem is the key to influencing future events, he added.
“The old guard does not understand the problem and if they do they are trying to avoid change and protect their vested interests in the wrong way. This can be government, corporations, educational systems or the media,” Tapscott said.
“Technology is enabling revolutions across the Middle East. Young people do not want to be subjects anymore. Until now revolutions have had a leader, technology has changed that,” he added.
Tapscott cited the example of Egypt where the former government's decision to turn off the internet simply drove people out onto the streets and accelerated the government's collapse.
“In Tunisia young people where using social media as a military tool, finding snipers, communicating that information via social media and allowing their own soldiers to find the snipers and stop them murdering their people,” he said.
Old Model of Democracy Out of Date
Any government that turns off the internet when facing revolt would be missing the point, Tapscott said.
“Revolution is not happening because of the current systems in place, it is happening despite them," he said. "In the Middle East the old thinking has been support tyrants because they provide stability and keep the oil flowing; the young people are revolting against this very kind of thinking.”
“Governments need to get away from slash and burn policy decisions," Tapscott said. "The current thinking on fiscal deficits highlights this problem, government’s need to think about how they can create public value.”
“The old model of democracy is out of date, we need a new model where citizens are actually engaged,” he added.
Tapscott cited a recent meeting with Paul Krugman, the Nobel Prize winning economist who was discussing how the collapse of the euro could lead to two decades of depression in Europe.
“This kind of thinking stands on the belief that economic problems are cyclical, how do you improve fiscal position, how do you improve the business confidence, the problems we face are not cyclical, we are witnessing a secular change,” he said.
An Example of Old Thinking
Intellectual property law and the music industry reflects the impact of looking at new problems and trying to solve them with old thinking, Tapscott said.
“EMI, the home of the Beatles, has a business model that sees them chasing revenue by suing children, suing people who love music," he said. "They need to stop this, change their business model and stop trying to find a legal solution to the fact that people can consume their product for free via the internet.”
“Music is no longer a product to be sold, it is a service to be sold. If the music industry understood this, allowed people to stream music for a couple of dollars a month then they would double their revenues and stop prosecuting their customers, and crucially their customers of the future.”
“The current thinking is killing EMI,” Tapscott said. “There is a paradigm shift, I am allowed to say that by the way as I wrote the book."