The lack of language skills in the United Kingdom is seriously damaging business, says a report.
Weak language skills have a financial cost for firms, says report
Talking World Class, a report from the CILT national language centre, attacks the "complacency" over the inability to speak other languages.
Firms in competitor countries such as France or Germany are much more aware of the need for languages when dealing with trading partners, says the report.
Backing the report, the CBI said poor language skills were a "big mistake".
The CILT report shows a series of interlinked problems with language learning - beginning with a low base level of language ability, a declining number of students learning languages and a negative impact on business.
It quotes research from the European Commission showing the UK has the lowest number of people able to speak other another language, in a league table of 28 European countries.
And it shows that when trading with English-speaking countries, UK businesses export more than they import.
But when they trade with non-English speakers, the reverse is seen.
This trade gap is linked by the report to the language gap - with claims that contracts are lost and opportunities missed because UK firms are failing to develop the language skills needed to communicate.
It says 80% of export managers in UK countries cannot communicate competently in another language.
The report also warns that the problem is not improving - with a decreasing number of students taking language courses at university. Between 1999 and 2002, there was a 19% fall in undergraduate students on French courses.
Last week, the higher education funding authorities warned that modern languages were a "vulnerable" subject area that might need to be taught in national centres, because of the difficulties in sustaining courses in individual university departments.
University courses in French and German have struggled to recruit students from a declining pool of students taking the subject at A-level.
"Anyone who is serious about doing business in an international context needs to wake up to the need for languages. British companies will be making a big mistake if they over-estimate the role of English when their competitors are already able to respond in several languages," said Hugh Morgan Williams from the Confederation of British Industry.
The Department for Education and Skills said: "In the most recent examinations, 15,000 more pupils obtained a good GCSE in a modern foreign language than in 1997."
By the end of the decade, modern language lessons will be available in all primary schools in England.
The Conservative education spokesman, David Cameron, said the decline in language learning was "not acceptable for a country of Britain's standing in the world. Not only does this harm the prospects of UK graduates, it also puts British industry and economy at a disadvantage".