The evolving landscape of policy and strategy from the 1920s to present

Paradigms are often invisible to us—they’re the water we swim in. So as we seek to explore new ways of thinking about policymaking and implementation, we need to be thinking about how our current assumptions and worldviews might be holding current practices in place, and about what might need to shift to make new ways of doing things possible. The evolving landscape of policy and strategy from the 1920s to present In our daily work we use the word “policy” and “strategy” sometimes interchangeably and at other times as distinct concepts depending on whether we are in government or business or academia. It is instructive to understand these words and their origins and use over the last 100 years as we embark on the policy journey. The story of “policy” and “strategy” is a tale of evolution and divergence, set against the backdrop of changing global landscapes. From their intertwined origins in the early 20th century to their distinct roles in modern governance and business, these concepts have navigated through complex socio-economic and political terrains, adapting and transforming along the way. History emergence The word “policy” has its roots in the late Latin term “politia” which means “the state, civil administration” and it was derived from the Greek word “politeia” which refers to “state, administration, government, citizenship.” The term “policy” started being used in the late 14th century to refer to the “study or practice of government; good government”. From the early 15th century, it was used to denote “an organised state, organised or established system of government or administration of a state.” It also came to represent “the system of measures or the line of conduct which a ruler, minister, government, or party adopts as best for the interests of the country in domestic or foreign affairs”.

On the other hand, the term “strategy” originated from the French word “stratégie” and the Latinized form of the Greek word “stratēgia” which means “office or command of a general.” The term was first used in 1810 to refer to “the art of a general, the science of war.” The term “strategy” started being used in non-military contexts by 1887. In the military, “strategy” refers to the overarching plan or set of goals designed to achieve victory in war or conflict. It encompasses the deployment of troops, equipment, and resources to achieve specific objectives. This is distinct from “tactics” which are the specific actions or short-term decisions made to implement the overall strategy. The 1920s and 30s: Policy is strategy In the 1920s, “policy” in both government and business contexts was synonymous with guiding principles and strategic objectives. Governments used policy to shape economic decisions and societal norms. Businesses, buoyed by the economic boom, developed policies focusing on expansion and innovation. Frederick Taylor’s The Principles of Scientific Management (1911), laid the groundwork for operational efficiency and management policies in businesses. Mary Parker Follett, a visionary in organisational theory, focused on human relations and participatory management in Creative Experience (1924) added a new dimension to understanding workplace dynamics and policies. Australia’s experience in this era exemplified the policy-as-strategy approach. The Bruce-Page government (1923-1929) used policy as a strategic tool for nation-building, emphasising infrastructure and industrial development through tariff protection. The creation of the Loan Council in 1927 established a uniquely Australian model of federal- state fiscal coordination, formalising intergovernmental financial strategy that would shape policy-making for decades. However, the Great Depression of the 1930s drastically altered this landscape. John Maynard Keynes’ now famous The General Theory of Employment, Interest, and Money (1936) advocated for government intervention in the economy, influencing New Deal policies and reshaping public policy. Government policy, particularly in the U.S., underwent a seismic shift with the New Deal, incorporating comprehensive strategies for economic recovery and social welfare. Business policies, in turn, adapted to the harsh economic realities, prioritising financial prudence and regulatory compliance. Australia’s response demonstrated this shift from laissez-faire to interventionist approaches, as governments grappled with unemployment and economic reconstruction while maintaining the federal-state balance that would become a hallmark of Australian policy-making. The Post-war era: Birth of modern strategy The conclusion of World War II marked the emergence of “strategy” as a key concept, especially in business and military contexts. While military strategy had ancient roots, its modern business counterpart began to crystallise in the 1950s and 1960s, mirroring the complexities of a rapidly evolving global market. Peter Drucker in The Practice of Management (1954) introduced concepts like management by objectives, shaping business strategy in the post- war era. Alfred D. Chandler in Strategy and Structure (1962) analysed the strategies of large American firms, solidifying the importance of strategy in business. Charles Lindblom in his The Science of “Muddling Through” (1959) highlighted the incremental and complex nature of policy-making and finally, Aaron Wildavsky: Speaking Truth to Power (1979) emphasised the political aspects and complexities of policy analysis. Australia’s post-war reconstruction embodied this strategic thinking in distinctive ways. The Curtin and Chifley governments focused policy deeply on strategic nation-building—immigration, industrialisation, and social welfare. The Snowy Mountains Scheme (1949) wasn’t just infrastructure policy—it was nation-building strategy, integrating immigration, industrialisation, and regional development. The creation of the CSIRO reflected a strategic bet on science-led development, establishing institutions that would drive policy and strategy for decades.

Business strategy diverged from policy, moving towards long-term planning and competitive positioning. Theories by Peter Drucker and later Michael Porter, who introduced frameworks like the Five Forces analysis, were instrumental in this evolution. Government policy, meanwhile, focused more on public administration and societal issues, influenced by systems theory and the rise of policy analysis. The interplay in the late 20th century As the 20th century progressed, the distinct paths of policy and strategy began to intersect and influence each other. Business strategy, with its focus on competitive advantage and market dynamics, started to impact government policies, particularly in areas like economic development and international trade. Australia’s experience in this period perfectly exemplified this interplay. The Whitlam government (1972-75) redefined policy as a tool for social transformation—healthcare (Medibank), education, and urban planning were strategic priorities that fundamentally reshaped Australian society. The Hawke-Keating reforms of the 1980s and early 1990s demonstrated policy-strategy convergence at its most effective. Floating the dollar, deregulating finance, and introducing compulsory superannuation weren’t just policies—they were strategic repositioning for a globalised economy, showing how government could use policy tools strategically while businesses adapted their strategies to new policy realities. The establishment of the Council of Australian Governments (COAG) in 1992 formalised strategic coordination across federal, state, and territory governments, while institutions like the Productivity Commission professionalised policy analysis, bridging academic rigour and strategic implementation. Conversely, governmental policies, especially regulations and international agreements, increasingly shaped business strategies. This interplay highlighted the interconnectedness of the public and private sectors in a globalised world.

Case study: The Snowy Mountains Scheme —Policy as strategic nation-building The Snowy Mountains Hydro-Electric Scheme (1949–1974) stands as one of Australia’s most ambitious and enduring examples of policy as strategy. Conceived in the aftermath of World War II, it was not merely an infrastructure project —it was a strategic blueprint for national development, economic resilience, and social transformation. Strategic objectives

• Energy Security: Harnessing the Snowy River’s flow to generate hydroelectric power for industrial growth.
• Water Redistribution: Redirecting water inland to support agriculture in the Murray-Darling Basin.
• Nation-Building: Stimulating post-war reconstruction, employment, and regional development. Policy instruments
• Legislative Framework: The Snowy Mountains Hydro-electric Power Act (1949) established the Snowy Mountains Authority, a federal body with sweeping powers.
• Immigration Policy: The scheme became a magnet for post-war migrants, integrating over 100,000 workers from more than 30 countries—an early example of policy-driven multiculturalism.
• Federal-State Coordination: Despite jurisdictional tensions, the scheme exemplified strategic intergovernmental collaboration across NSW, Victoria, and the Commonwealth.

Strategic execution

• Engineering Innovation: The project involved 16 major dams, 145 km of tunnels, and 7 power stations—requiring cutting-edge engineering and logistics.
• Workforce Strategy: A deliberate mix of skilled and unskilled labour, with training programs and community infrastructure to support long-term settlement.
• Narrative Framing: The Snowy was framed as a symbol of modern Australia—progressive, inclusive, and technologically advanced. Legacy and global relevance
• The Snowy Scheme remains a benchmark for strategic infrastructure planning. It demonstrated how policy can be used to shape geography, economy, and identity.
• Its success influenced later projects like the Ord River Scheme and informed Australia’s approach to water and energy policy for decades.
• Globally, it stands alongside the Tennessee Valley Authority and the Hoover Dam as a model of integrated strategic planning. Lessons for contemporary practice The Snowy’s approach offers insights for current challenges:
• Long-term vision with staged delivery: 25-year execution with clear milestones
• Narrative as strategy: Creating public buy-in through nation-building story
• Integration by design: Infrastructure as a vehicle for social policy (migration/integration)
• Institutional innovation: Creating new governance structures (Snowy Mountains Authority) when existing ones don’t fit.

The 21st Century: Complexity, convergence, and new paradigms In the 21st century, the narrative of policy and strategy continues, marked by increasing complexity and fundamental shifts in how both concepts operate. Global challenges like climate change, technological disruptions, and geopolitical shifts demand strategic thinking in policy-making and a policy-minded approach in business strategies. The data revolution and evidence-based approaches Strategy and policy increasingly converge around data. Australia’s Productivity Commission pioneered evidence-based policy review, while businesses adopted similar data-driven strategic approaches. The COVID-19 response exemplified this convergence—real-time health data drove both government policy (lockdowns, border controls, JobKeeper designed in days) and business strategy (pivots to digital delivery, complete strategic reimagination overnight). The pandemic compressed both policy and strategy cycles, challenging the traditional temporal mismatch between policy development (years) and strategic pivots (months or weeks). Agile and iterative design The traditional linear policy cycle has given way to iterative approaches borrowed from business strategy. Design thinking and behavioural economics now shapes policy through initiatives like NSW’s Behavioural Insights Unit. “Policy labs” and regulatory sandboxes — such as ASIC’s fintech sandbox—show governments adopting startup-style experimentation. This represents a fundamental shift from the “announce and defend” model to “test, learn, and iterate.”

Platform thinking and digital ecosystems Digital platforms force a complete rethinking of both concepts. When government creates digital identity systems (myGov, Digital ID) or data- sharing frameworks (Consumer Data Right), it’s simultaneously policy- making and platform strategy. Businesses must now factor regulatory technology and “policy as code” into their strategic planning. The distinction between policy implementation and digital strategy has essentially dissolved. Multi-stakeholder governance Neither pure government policy nor corporate strategy suffices for contemporary challenges. Australia’s climate and energy debates illustrate this complexity—the Renewable Energy Target, National Hydrogen Strategy, and Net Zero Economy Agency demonstrate hybrid approaches where policy and strategy must be co-created across government, business, and civil society. The National Reconstruction Fund exemplifies this new model, blending public policy objectives with private sector strategic capabilities. Speed and adaptation challenges Perhaps the starkest change is the acceleration of both policy and strategy cycles. Traditional five-year strategic plans and lengthy policy development processes struggle to remain relevant. Instead, we see adaptive management approaches, continuous monitoring and adjustment, and the rise of “perpetual beta” in both government services and business models. Australia’s Digital Economy Strategy and rapid pandemic response mechanisms show how both sectors are learning to operate at digital speed while maintaining democratic accountability and strategic coherence.

Artificial Intelligence: The great convergence accelerator AI represents perhaps the most profound challenge to traditional policy- strategy distinctions. It operates at speeds that collapse the gap between strategic planning and tactical execution, while raising policy questions that require immediate strategic responses. AI development outpaces policy by design. While Australia’s National AI Centre and AI Ethics Framework attempt to provide guardrails, the technology evolves faster than traditional policy cycles can respond. The result: “regulation by iteration”, where policy must be continuously updated through technical standards, industry codes, and adaptive regulation rather than static legislation. AI fundamentally alters strategic planning itself. Predictive analytics replace intuition, machine learning identifies patterns humans miss, and generative AI accelerates option development. The Australian Public Service’s use of AI for service delivery (Centrelink’s automated systems, ATO’s fraud detection) shows government adopting private sector strategic tools, while businesses increasingly need to factor AI governance and policy compliance into their core strategy. Unlike previous technological shifts, AI raises existential policy- strategy questions. Australia’s Critical Technology List and Quantum Commercialisation Centre represent attempts to maintain strategic autonomy in an AI-dominated world. The AUKUS Pillar 2 focus on AI cooperation shows policy and strategy merging at the highest levels of national security. Case Example: Australia’s responsible AI ecosystem: Rather than rigid legislation, Australia is developing an adaptive ecosystem, combining voluntary AI Ethics Principles, sector-specific guidelines (TGA for medical AI, ASIC for financial algorithms), and regulatory sandboxes. This represents a new model where policy provides principles while strategy emerges through experimentation.

An ongoing journey The journey of “policy” and “strategy” from the 1920s to the present is a testament to their adaptive nature. From their shared beginnings to their divergent paths in the mid-20th century, and their complex convergence today, these concepts have been integral to navigating the ever-changing global landscape. For Australian practitioners, this evolution carries particular lessons: the importance of federal-state coordination, the value of evidence-based approaches pioneered by institutions like the Productivity Commission, and the need to balance Westminster traditions with innovative, agile approaches demanded by digital transformation and global challenges. As we move forward, the boundaries between policy and strategy will likely continue to blur. Success will require fluency in both languages— understanding when to apply strategic thinking to policy problems and when policy considerations must shape strategy. The future belongs to those who can navigate this convergence, combining the democratic legitimacy and public purpose of good policy with the agility and innovation of effective strategy. John Kingdon’s (1984, updated 2010) influential work reveals that policy change rarely follows a neat, linear path. He identified three streams flowing independently through government work: the problem stream (issues demanding attention), the policy stream (solutions circulating among specialists and advocates), and the politics stream (shifts in political mood, election results, or changes in government). Policy breakthroughs happen when these streams converge—when a recognised problem meets an available solution at a politically opportune moment. Kingdon called these moments “policy windows”, fleeting opportunities when motivated policy entrepreneurs can couple the streams together and drive change. Understanding this framework helps public servants recognise when conditions are ripe for action and when to build coalitions, refine solutions, or reframe problems.