The school day should be extended to prepare pupils for the workplace, stop them joining gangs and give them a "haven" from chaotic homes, Labour has proposed.

Shadow education secretary Stephen Twigg will use a speech on Thursday to back longer hours in the classroom as he launches a review of how schooling can be made more relevant to the 21st century.

It is to be led by Labour MP Barry Sheerman, a former chair of the Commons education select committee, after business leaders said a third of young people emerged poorly prepared.

Twigg, in a speech to the North of England Education Conference in Leeds, will say too many schools are run like 19th century institutions set up to produce factory workers.

"The workers down tools when they hear the bell ring, and are strictly separated into production lines, focused on building the constituent parts of knowledge - maths, science etc," he will say.

"At the same time, students are rigidly separated. Taught in batches, not by ability or interest, but by their own date of manufacture.

"While noble in its origins, this 19th century form of industrial education feels distinctly ill at ease with the demands of a modern, globalised economy, which demands collaboration, innovation, entrepreneurship, and an appreciation that developing value comes not from more efficient forms of production, but more skilled ones."

A recent survey of employers found they considered a third of the workforce left school at 16 "poorly or very poorly prepared for the work place", he will point out.

Sheerman's review will take evidence on initiatives such as extended hours from teachers, parents, businesses and universities and examine overseas education systems.

Pupils at schools which had already introduced longer days were "getting a better perspective of the expectations upon them" at work, Twigg will say.

"A longer school day appears to be a smart way forward for a number of reasons.

"For secondary pupils it would mean getting used to a work-like timetable. A long hours culture has its drawbacks, but how many employers expect their workers to leave the office at 3.30pm?

"A longer day can be progressive in nature. Too many pupils who suffer from poor housing conditions struggle to find a quiet place to study or do their homework.

"Providing a longer school day will give these students a haven away from what in some cases can be chaotic and troublesome home lives.

"Third, it can take young people, quite literally, off the streets.

"Numerous studies have shown that gang activity is often most prevalent in the hours immediately after schools close, and providing longer school-based activities may prevent some from getting into trouble."

Twigg will also call for money to be saved by teaching using electronic readers rather than buying physical text books for pupils and an for improvement in IT teaching which he will say is too often "little more than a glorified typing course".

"We need far more rigour in ICT teaching, with higher quality training, higher standards and continual assessment of what pupils are being taught."