Children must be taught to take risks, lose races and sit exams they can fail, a business leader said yesterday.
Sir Digby Jones, director general of the CBI, warned that Britain was creating a nation of " victims" who blame other people for their failures.
The UK will fall behind economic rivals such as China and India unless children are freed from the growing compensation culture and taught to take a chance, he told headteachers.
"We are all taking part in something of a deceit because we are teaching the next generation that risk doesn't exist," he said.
"We are saying to them you can have rights until they are coming out of your pores.
"But responsibilities, taking charge of your own actions? Taking charge of your children's actions if you are a parent? We don't seem to have got it."
Speaking at the National Association of Head Teachers' annual conference in Telford, Shropshire, Sir Digby went on: "We are trying to create a nation of victims. Because when you are a victim, you can blame somebody and then when you blame people, you are entitled to compensation."
Sir Digby said children should be given medals for winning races or coming second or third - but not for just taking part.
He said he did not understand how teachers could work in schools when there were parents "almost egging you on to break the rules".
"And you have got kids saying 'I have got rights, you know'. Unless you educate children about risk, get them to understand it, get them to embrace it, get them to exploit it, then we will fail as a nation," he said.
