A survey by the Welsh Assembly government revealed that 20 per cent of school-leavers have no qualifications, while only 30 per cent achieve NVQ level 3.
Dr Grahame Guilford, a member of Wales's Confederation of British Industries council, said that a significant minority of youngsters have poor business awareness and attitude to work.
Dr Guilford, keynote speaker at the Skills Summit Wales conference, held in Newport this week, feels little has improved since skills were surveyed in 2003. He says Welsh attainment is the lowest in the UK.
"Anecdotal evidence from CBI members suggests not much has changed," he told TESCymru. "We're still concerned about basic literacy and numeracy."
Jane Davidson, minister for education and lifelong learning, has admitted that basic skills are a problem. Today she is expected to launch a strategy to improve the situation. She will use the conference, which was organised by ELWa, the Welsh post-16 funding agency, to outline her improvement strategy. But Dr Guilford wants politicians to respond more to industry.
"Business knows best what's needed," he said. "There should be a proper balance between supply and demand in skills initiatives.
"We accept our responsibility for developing workforce skills, and regard these as more important than product investment and capital development."
The Federation of Small Businesses wants skills courses to be bite-sized and targeted at solving specific problems. An FSB spokesman said: "A firm with five staff cannot release people for long periods to train at colleges, where much of the funding is directed."
Dr Guilford is director of site operations for GE Health, which employs 500 people in Cardiff. He is also chair of governors at Radyr comprehensive, Cardiff, and is keen on closer relationships between school and industry.
"Sixty per cent of companies tell us they have links through work experience or mentoring," he said. "Business sees this as a way of changing attitudes."
Changing attitudes was also the theme of Marie Stubbs, celebrated for rescuing a London comprehensive from near anarchy after it was placed in special measures. She told the conference that both realism and urgent action were needed in Wales.
"You can't just say wouldn't it be lovely if the EU gave us all the money we want," she said. "You have to dream real dreams."
Recalling her own headship, she said: "There were lots of plans and things written down, but people weren't seeing the shambles.
"Young people in Wales need an improvement in basic skills now."
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