Dickins, who was chairman of the BPI for a fourth time between 2000 and 2000, made the impassioned attack as part of a keynote conversation with REM manager Bertis Downs at In The City.
He said that the music industry had failed to adapt its model to the internet age because executives were unwilling to abandon the model that had made them rich.
"I said to the IFPI council that we shouldn't try to shut down Napster, we should employ him," Dickins said. "The Digital Economy Act, when I see things like that they will never work for the music industry."
Dickins explained that he is not an advocate of free but is thinking of how to compete with free. To do this, he favours a system of micro economy, whereby albums are sold for as little as £1.
"It is so cheap you don't have to make a decision, you just buy it," he explained.
"I think we could see the age where we could sell 200m albums," Dickins added, suggesting that Lady GaGa has racked up 1bn illegal downloads of her music.
Dickins also criticised the policy of only allowing iTunes users to listen to 30 seconds of a track. "If you listen to 30 seconds of a Sigur Ros track you won't buy it," he said. "We have got people on the pay page and they want to buy things."
Downs, however, took a more moderate view, suggesting that although using the Hype Machine to sample music had led him to buy a number of albums, this would not necessarily be the case for everyone.
The Dickins / Downs keynote kicked off the second day of ITC 2010, which also included panels debating O2's sponsorship of live music, fan analytics and internet radio versus traditional broadcasting.
Last night's live showcases saw Factory Floor, No Age and 2:54 draw audiences to various Manchester venues, while Mount Kimbie are expected to be the big draw for tonight.