Established views on training and development will have to be radically changed if the UK is to compete in the growing global economy, Gordon Brown has told business leaders.

Speaking at the CBI annual conference, the prime minister said there needs to be new incentives and obligations to train. Rather than create jobs for unskilled workers, the government, employers and individuals need to work together to skill up for the new economy.

It is estimated that demand for skilled workers will rise by 5 million over the next 10 years, while the demand for unskilled labour will drop by a similar amount over the same period.

“If in the old days the problem was unemployment, in the new world it is employability,” said Brown.

He said in the old days it was seen as the duty of government to create work for the inactive, but in the new world there has to be a duty on both the government to help the inactive become employable, and a duty on the inactive to take up those opportunities.

The welfare system should also be reformed and resources transferred from welfare to education, he said. Benefit claimants should be encouraged to change from passive recipients to active job and skill seekers.

He also called on employers to play a more central role in the development of further education colleges.

He outlined a raft of new initiatives based around “rights and responsibilities” and “incentives and obligations”, specifically:

• To expand the number of apprenticeships
• To equip sixth form centres and community colleges with state of the art training facilities to specialise in adult vocational training
• To train lone parents earlier so that they are prepared to return to work as soon as their children leave school
• Obligatory skills training for the unemployed
• To explore the skills of those on incapacity benefit to allow them to take up new opportunities.

He also announced the creation of a new adult careers and advancement service to create a commitment “not just to one-off learning but to life-long learning”.

“Quite simply the old system does not fit the aspirational society the Britain of the future needs to be. The new idea is the development of all the talents of all our people,” said Brown.

“Up against the competition of over 2 billion people in China and India – with 5 million graduates a year – Britain, a small country, cannot compete on low skills but only on high skills. Our imperative – and our opportunity – is to compete in high value added services and manufacturing; and because that requires the best trained workforce in the world, our challenge is to unlock all the talents of all the people of our country.”