The UK education system is continuing to fail business, Sir Digby Jones, the outgoing head of the Confederation of British Industry (CBI), has alleged.
Sir Digby thinks the UK is leading the way on globalisation
Speaking ahead of standing down from his position next month, Sir Digby said half of all school leavers were still unfit to enter the job market.
He told the BBC's Working Lunch show that the government should have done more to resolve the problem.
But Sir Digby praised Labour's achievements in running the economy.
He also said the UK was leading the way in meeting the challenges of globalisation and the growing strength of developing economies led by China.
'Fabulous business climate'
Describing the period since he took up the top job at the CBI in 2000, he said the UK's continuing economic stability, low interest rates, low unemployment and low inflation had created a "fabulous situation for business to operate in".
But the skills shortage of British workers remained a serious problem, he said.
"When I arrived in the job in 2000...I could not believe...that one in five of the adult population of the UK couldn't read, write and count like an 11-year-old," he said.
"And then the following summer I get told that half the children taking their GCSEs didn't get a C or above in English or Maths.
"In other words, basically they were unfit to go out and get a job.
He said that the situation had not improved in the six years since.
While much of the problem was general complacency in UK society, Sir Digby added that "government could have done a lot more, got on the case more quickly".
Although he recognised that the UK now has the most literate 10-year-olds in Europe, he said this achievement needed to extend through to secondary education.
"We are doing all the globalisation stuff better than the UK, France, Japan and Germany...but in the skills base there is a real missed opportunity."
Sir Digby added that "the 21st Century belongs to Asia", and that for UK workers to improve their job security in the world economy, they needed to improve their skills base.