The United Kingdom lacks world-class business schools, universities are failing to produce the skills business needs and management research is of limited relevance, according to a government panel.
These are the interim findings of the Council for Excellence in Management and Leadership, established in April 2000 to address the UK's poor productivity performance.
The CEML was charged with developing a strategy to ensure UK managers match the best in the world.
Sir Anthony Cleaver, chairman of the CEML, said the report showed "the scale of the mismatch between supply and demand in the management area".
The report says that despite top UK schools competing with the best in the world, "they are not punching as much weight as they need to in the global market".
Anecdotal evidence suggested business education was not meeting employers' needs. The council said it would undertake a further study of graduates in the field to assess the problem.
The CEML proposes introducing options for undergraduates in other disciplines to study management, more and higher paid full-time PhD places and a conversion doctor of business administration to allow executives to teach in higher education.
A joint inquiry with the Foundation for Management Development recommends a partnership scheme whereby business would act as a broker to develop research agendas in business schools.
Liz Amos, adviser to the council, said the key issue was how well business education connected to the business community. She said business schools had been positive about the report, aware that this was a problem but lacking resources to remedy it.
The CEML is due to issue its final report in April 2002.