Government policies on education are failing to remedy the UK's shortage of skilled workers, the director general of the Institute of Directors has said.
A lack of qualified workers hurts the economy, Mr Templeman says
Around 25,000 16-year-olds a year leave school with no GCSEs, Miles Templeman said in a speech to the Institute of Economic Affairs.
He said the skills shortage last year left 135,000 vacancies unfilled.
Mr Templeman called for tax cuts for firms investing in training, and for an improved apprenticeship system.
Too many apprentices get poor training from poor providers, he argued.
He also argued vocational qualifications must take better account of employers' needs.
The shortage of skilled workers is causing "obvious damage" to the economy, with British productivity lagging behind its competitors, Mr Templeman said.
"Successive generations of policy-makers have been aware of deficiencies in education and training but have failed to rectify these failings."
He added: "Around four and a half million people have no qualifications at all.
"Added to the problem of poor basic skills, the UK has also failed to develop a proper system of vocational education."
The Department for Education and Skills acknowledged challenges remained, but said all the indicators of academic progress at ages seven, 11, 14 and 16 were "pointing in the right direction".
A spokesman said the government's Skills Strategy was tackling the skills gaps between the UK and its main economic competitors.
"It introduces a demand-led system of provision for skills, underpinned by reformed vocational qualifications and driven by the needs of employers through a powerful sector skills network," he said.
"The strategy gives employers the people with the skills they need for productivity and gives individuals the training they want, where and when they need it."
He also said the government was reforming apprenticeships, aiming to meet the needs of the individual and give greater opportunity for progression.
"Reforms will ensure that apprenticeships meet the highest standards and encourage take-up among employers and young people and that by 2008 the numbers completing apprenticeships will increase by three quarters," he said.