UK business needs to modernize or miss out on the next generation of recruits, Albert Ellis, chief executive of Harvey Nash, told the annual CBI Business Summit.

In his speech, Ellis claims social, demographic and economic changes and inadequate educational programmes have caused an endemic skills shortage in the UK and left businesses trailing in the wake of increased global competition.

Ellis predicts that by 2030, 46% of the UK population will be aged 50 or over rising from 33% in 2002. Also, by 2012 skilled migrants will contribute £77bn to the UK economy and will indirectly support over 650,000 UK jobs.

He believes that by 2012 an extra 19,000 skilled IT and telecommunications workers will be needed as demand rises for e-commerce and software specialists.

Ellis believes that businesses need to embrace skilled migration, recruit from wider social groups and offer flexible and rewarding working practices to attract and keep a new generation of talent and ultimately help safeguard the long-term competitiveness of the UK in the global economy.