Schools which have abandoned competitiveness are producing a new generation of employees who are bad for business, the director general of the CBI warned yesterday.
Digby Jones told an all-party committee of MPs that schools must do more to give pupils with "the wish to win" if they are to become successful workers.
He told the House of Commons Education Select Committee that he was horrified by the number of schools who had abandoned the traditional competitive sports day because teachers disliked identifying any child as a loser.
Mr Jones told MPs that the world was a "rather nasty, brutal place" and teachers should not shy away from their responsibility to teach students of the importance of competing to win.
Speaking after the hearing, Mr Jones said: "I think children should be taught that there are winners and that everybody can have it in them to be a winner but people should also be taught that there are losers and learn to taste the deep disappointment of defeat.
"But we live in a society where people are brought up to believe that everyone can have prizes. The idea that no one can lose is very damaging to competitiveness."
Increasing numbers of business leaders have complained to the CBI that school leavers now arrived at job interviews lacking any "wish to win", he said.
"What our members tell us is absent at interviews with young people is the wish to win. There has been a generation of teachers who have brought about the idea that you cannot fail. But of course you can fail."
However, Helen Jones, a Labour member of the Education Selection Committee, told MPs that Mr Jones's view was outdated and that the vast majority of schools regularly held competitive sports days.