Ministers are being warned that £13bn of additional spending is needed each year to ensure the UK workforce can prosper in the future economy.
Research by the Confederation of British Industry (CBI) showed 90% of people will need new skills by 2030.
The business lobby group argued that the UK faced a “stark choice” between investment in its people or sustained rates of high unemployment as technology evolves – challenging the most disadvantaged in our society particularly.
Image: Automation is among the threats to jobs
It said that at a time of growing automation, participation in training for those in lower-skilled jobs was 40% lower than that for higher-skilled workers.
The CBI added that the COVID-19 pandemic – which has forced unemployment to a three-year high – offered an opportunity to grow learning and skills.
Its director general, Dame Carolyn Fairbairn, said the damage made investment in skills all the more important and would help the government meet its election pledge to spread prosperity.
“The right skills strategy can help every worker to progress their careers, drive up living standards and level-up the country,” she said.
“But a failure to act will leave businesses facing skills shortages and workers facing long-term unemployment. We are at a fork in the road that requires urgent and decisive action.
“The recently announced Lifetime Skills Guarantee is an important step in the right direction, but it is only a start.
Where jobs have been lost in the UK
She also said it was time for an apprenticeship shake-up, arguing the apprenticeship levy had failed to deliver for both businesses and new workers alike.
The CBI’s recommendations included “training tax credits” for small and medium-sized firms and transforming job centres into one-stop “Jobs and Skills Hubs” to support workers looking to retrain.
Education Secretary Gavin Williamson responded: “Our priority is making sure people across the country gain the skills we know employers value and that will help our economy recover as we build back better from coronavirus.
“The prime minister recently announced a new lifetime skills guarantee that will help support adults across the country to make lifelong learning a reality – opening doors for more people to realise their talents, develop new skills and get better jobs.
“To help boost apprenticeship opportunities, we are supporting employers to invest in the skilled workforce they need to recover and grow by offering £2,000 for each new apprentice they hire aged under 25 and £1,500 for those aged 25 and
over, in recognition of the value apprentices of any age can bring to businesses and to our economic recovery.
“Our forthcoming white paper will also outline plans to build a high-quality further education system that will provide the skills that individuals, employers and the economy need to grow and thrive.”