The "dire" quality of many school leavers threatens to undermine Britain's future success in manufacturing and science, leading business figures have warned.
The CBI said thousands of teenagers were turning their backs on studying science because of inadequate teaching and a belief that they can get better A-level grades in easier subjects.
Bosses warned that science and technology firms could abandon British graduates in future and look abroad to economic rivals like India and China for new staff.
Flanked by the UK heads of electronics giant Siemens and pharmaceuticals firm sanofiaventis, CBI director-general Richard Lambert said the Government had to act to avert a crisis.
"The UK risks being knocked off its perch as a world-leader in science, engineering and technology," he said. "We cannot afford for this to happen."
The call came just days before 250,000 teenagers receive their A-level results. Last week academics warned that physics in particular is in long term decline in schools and universities as many students pick "easier" courses.
Alan Wood, chief executive of Siemens UK, said "embarrassingly large numbers of people" leave secondary school unable even to read and write properly. Siemens struggles to find well-trained school leavers to work in manufacturing and take up apprenticeships.
"We find the quality of people coming out of the secondary education system is pretty dire on the whole," he said.
There was a "very real threat" that firms would look overseas to India and China for new skilled recruits unless action was taken, he said.
Nigel Brooksby, managing director of sanofi-aventis UK, called for reform of the school science curriculum. "We employ just over 3,000 people in the UK. It is not the quantity of graduates, it is the quality. We are having to retrain graduates in laboratory skills."
The CBI called on Ministers to do more to recruit more specialised science teachers to inspire children to study the subjects.
The new combined "double science" GCSE which many pupils now opt for does not provide the grounding they need to take sciences at A level, the group said. One possible solution would be to give all state pupils the right to study physics, chemistry or biology as separate subjects at GCSE - as is the case in many independent schools - rather than the combined science courses, the CBI said.
Demand for newly qualified chemists, physicists, engineers and lab technicians has been rising consistently.
Over the next eight years the UK will need to have found 2.4 million new staff with these skills, the CBI said.
Schools Minister Jim Knight insisted the Government was addressing the issue and said there had been a 57 per cent increase in the number of science, technology, engineering and maths graduates.
"Increasing the number of scientists is a priority for this Government," he said.