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Yet currently, six out of ten (59 per cent) firms employing STEM-skilled staff say they are having difficulty recruiting, and the low take-up of STEM subjects at university is a large part of the problem.

There has been a 15 per cent fall in engineering and technology graduates (23,300 to 19,700) over the past decade.

Looking abroad to hire 

Employers are acting rationally by looking abroad to hire STEM graduates. A third (36 per cent) of larger firms are recruiting from India and 24 per cent from China.

Larger firms are twice as likely as smaller ones to be looking at the expanded EU, which includes states such as Poland, to hire people with STEM degrees.

Overall, a third of firms (35 per cent) say they will look to Europe in the next three years.

Edexcel's managing director, Jerry Jarvis, said that the Leitch review of skills, published well over one year ago, provided a wake-up call for us all.

It showed that a third of UK adults do not hold a basic school-leaving qualification – that is double the proportion in Germany.

It also drew into focus that whilst the UK is producing 250,000 graduates every year, China and India are producing four million. The implications for our global economic competitiveness are clear.

"All of us involved in the UK’s education and skills must work ever closer in partnership to address this major challenge by breaking down the institutional barriers between education and the workplace to create a new culture of learning," Jarvis added.

Lack of suitable candidates 

It is also clear that employers do not believe that going to university at 18 is the only route to success for young people.

Around half of the employers surveyed offer apprenticeships, giving young people a chance to develop valuable vocational skills and have a strong start to a rewarding career.

Many companies make sure their apprentices are able to go on to higher-level studies if they have the right attitude and ability.

There is evidence that bureaucracy, cost, and a lack of suitable candidates are holding back greater business involvement, which the Government must tackle.

Eighty one percent of the largest employers report being bogged down by red tape, 57 per cent have difficulty finding suitable applicants and 22 per cent of all firms find the scheme too costly.

Conversational ability 

Developing conversational ability rather than full fluency is what matters most when employers look for ability in a foreign language.

Seventy-five per cent say they want this skill, which is about building rapport and shows business people abroad that UK firms are prepared to make the effort.

The main demand is still for European languages, with 50 per cent wanting French, 49 per cent German and 41 per cent Spanish.

Nevertheless, four in ten (43 per cent) are interested in Mandarin/Cantonese as ambitious firms look to break into new emerging markets.

Val Gooding, CEO of BUPA, pointed out that your customers stay with you if your people deliver a great service and will recommend you to more customers, but warned that you are not going to win customer confidence if employees haven’t got the skills to deliver a good service.

“People think customer service is just about being polite and caring, but you can’t be polite and caring if you don’t know how to do your job properly," she added.

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Related links

• CBI