Employers need to improve their training and educational services in order to help their business to succeed, according to trade and industry secretary Alistair Darling.
Speaking on BBC Radio 4's Today programme, Mr Darling stated that while there has been an improvement in the quality of graduates and in the number of good school qualifications being gained, employers could do more to help those with fewer skills.
He added that businesses should look to Germany as an example of how enterprise and the government can work together to boost basic skills.
"There is a problem with those at the bottom end who don't have enough skills; they don't have enough qualifications," he commented.
"That's why we need to work together with businesses," he added.
Last week, the Chartered Institute of Personnel and Development claimed that line managers need to do more to help develop their employees' skills.