In 20 years' time half of our population will be 50 and over. This demographic time bomb requires action

Employers constantly bemoan the lack of skills, particularly among young people, to the point where it has almost become a mantra. At a recent event I heard chief executives of major IT companies talk about their need for very high level skills - people with the ability to analyse and understand complex problems and advise businesses on how to tackle them.

But the skills crisis is not an issue for just one sector or one age group. We have to think about the entire workforce. Just take a look at the demographics. Our labour force is ageing, facing a steady decline in the number of younger people entering it. The number of workers under 35 is already falling - the fastest decreases are among 18 to 24-year-olds. In 20 years' time half of our population will be 50 and over. This demographic time bomb requires employers radically to reassess how they train their workforce. The number of people with new skills is in decline. That, combined with competitive pressures to improve skills, will put the onus on retraining.

At our forthcoming summer conference one of the main items on the agenda will be 14 to 19 curriculum reform, including the introduction of the new specialised Diploma. The first ones are due in 2008.

The groundwork is still being done, with much discussion on how they should be structured, how they will meet employers' needs, and whether different sectors will want different design frameworks. We would argue that we need a common framework for this - a structure that is flexible to meet the needs of all the different sectors. The traditional A-level-style curriculum, while focusing on subject specific knowledge, has plainly failed to give many young people the broader skills, the entrepreneurial drive, the team-working, and the problem-solving abilities that employers crave.

We can only hope the reforms will provide these. But there has to be continuity and articulation between such qualifications for young people and qualifications for adults. It is so important that young people can start on a road, and know that they can progress down it, building and developing their capability in particular areas - and that they don't just reach a dead end and have to start again, hit a barrier or change direction.

That is what the new Diploma structure is intended to do. Whether it will succeed remains to be seen. But if we can develop that continuity for future generations of young people, we still need a much greater commitment from employers.

A report last week by the Public Accounts Committee stated that skills gaps lose the UK £10bn a year. But it also showed that a third of employers offer no training at all to their employees. What companies do spend is concentrated on low-level statutory training, such as health and safety, or high level, expensive professional managerial training.

We believe employers should invest £500 a year training and developing each person in their workforce, compared with £205 a year now. We are also calling on government to underpin workforce training with new policies to raise standards across the board - including more imaginative approaches to fees and co-funding, tax incentives, licence to practice and similar measures.

It is no good moaning about the young people of today when what we should be really be worried about is the entire workforce of tomorrow.

The Association of Colleges & Sixth Form Colleges' Forum 16-19 Summer Conference takes place at Homerton College, Cambridge on June 28-30.

The writer is Chief Executive of the Association of Colleges.