Half of children are unable to speak properly when they start school, a children's communications charity says.
The campaign is calling for support for pre-school workers
I CAN said many of these were ill-equipped for learning and making friends.
Without support, over 50% of those who started school last month risk academic failure and social exclusion, costing the economy £4bn over their lifetime.
The charity urged the government to focus more on communication skills in the early years of a child's life.
The Cost to the Nation of Children's Poor Communication report is part of I CAN's Make Chatter Matter campaign.
It found that one in 10 children in the UK will have long-term communication problems, while in areas of high unemployment and poor housing, as many as 80% of five-year-olds are starting school without the necessary language skills.
And it also showed school leavers with poor communication are forced to compete for a dwindling number of low-paid jobs or turn to criminal activities.
Author of the report Mary Hartshorne said: "A lack of government focus on communication skills in the early years is costing us billions.
"Worryingly this is just a fraction of the full financial impact since this does not include schooling costs such as additional support, statementing and tribunals.
"Educating children without basic communication skills is like building a house on the sand.
"We need to help children pre-school, otherwise they are starting their educational career at a major disadvantage."
Susan Anderson, of the Confederation of British Industry, said employers need people who are confident and articulate communicators to work with customers and colleagues.
"The cost of poor basic skills is huge - for society and the economy as a whole."
The Make Chatter Matter campaign is calling for a national strategy to give families and early years workers the knowledge and skills to support all children.
It also wants communication-friendly early years settings and investment in specialist help for children in need.