The post-16 sector, including further education, needs to encourage colleges and universities further down the vocational route, said Professor Vincent Watts, chairman of the East of England Development Agency.
He says colleges should get extra funding to enable them to run courses which are relevant to industry training requirements but for which student enrolment is unpredictable.
Colleges, he says, should be funded to market these courses to potential students on the basis of their employability benefits. This would be a radical departure from the current system, under which decisions about course provision are made according to student demand.
He argues that the change in emphasis is needed to tackle an economy in which "we are working longer hours but deliver mediocre performance" compared with our foreign rivals. The UK is ahead of most countries in the long-hours culture, with the notable exception of the US.
"Our relatively low productivity is a serious issue," said Professor Watts, also vice-chancellor of the University of East Anglia. "What we don't want is a load of high-tech jobs which our workforce can't handle because we then have to import skills. We need to focus on skills which are relevant to business needs.
"There is likely to be a need for much more radical change. HE and FE are set up to respond to individual training aspirations but decisions made by individuals are arbitrary. There are a lot of media studies courses - far more than there are jobs available. We need to persuade some of them to tackle skills where they can get rapidly into employment.
"How many Renaissance art historians does the country need?" He was speaking at the National Training Organisation national council's conference in London. Concern over the quality of FE provision was reinforced in the results of a Confederation for British Industry survey.
Only 38 per cent of CBI members considered that FE was providing "good" or "excellent" quality, compared with 58 per cent for HE and 74 per cent for private providers.
National training organisations need to have a bigger input into local learning and skills council decision-making to ensure national needs are considered alongside local demand, said Dr Andy Powell, chief executive of the NTO national council.
"Painful though it is, we will end up with 20-something of these sector organisations," he said. "We have got to integrate sector and local priorities."
Mr Powell, also a keen interventionist, said industry needs help to overcome the pressure which shareholders place on generating short-term performance at the expense of longer-term investment in workforce training. "I think there needs to be intervention," he said. "I think we have to provide an individual right to lifelong learning."
While he won't go as far as to issue a clarion call of "employers of the world unite", he concedes industry could learn a lesson from unions about about making sure local and national agendas are matched.