The warning comes from a World Health Organisation report and leading psychologist Professor Tanya Byron.
Prof Byron, who specialises in child and adolescent mental health, said a growing number of young people are so terrified of getting bad grades that they suffer from stress and never develop the 'emotional resilience' needed to succeed in later life.
She delivered her warning as millions of teenagers are in the middle of GCSE and A-level exams.
Her comments also coincided with a report which revealed that the number of teenagers who have self-harmed has tripled in the last decade in England.
The Health Behaviour in School-Aged Children (HBSC) report revealed that 20 per cent of the 15-year-olds questioned had hurt themselves in the previous year.
The study, produced along with the World Health Organisation, spoke to 6,000 people in England aged 11, 13 and 15 and is due out later this year.
Self-harm can include biting and burning, as well as cutting oneself.
Prof Byron spoke to Radio 5 Live presenter Richard Bacon about the increasing pressures on young people – and revealed that she felt sorry for her own children, aged 16 and 18, because of the stresses and strains put on them by the education system.
She said: "I just think, 'Oh, you poor things'. I mean it's ruthless and it's endless. It is continuous assessments and it is exams, it's AS-levels. There's a lot of pressure on kids even without parents adding to it."
The 47-year-old who has presented TV programmes on child behaviour such as Little Angels, said: "We are a risk-averse society. I say children are being brought up in captivity. Kids nowadays have more managed lives.
"You don't really see kids on the streets any more. I grew up in the 70s, I was out on my bike with my mates. We took risks, we did things, we weren't all supervised.
"Now you see kids fear failure. They are not really given the opportunity to take risk or experience challenge or fail at anything.
"So failure becomes a massive issue for them. They start to put themselves under so much pressure and that's when they become vulnerable."
Professor Byron said adolescents are particularly vulnerable to psychological pressures because their prefrontal cortexes – the part of the brain that controls rational thought, problem-solving and empathy - is not yet fully developed.
She added: "A lot of children don't get the depth of experience or the confidence in their learning or themselves that they need.
"I see a lot of children who lack emotional resilience... the ability to take the knocks of life, fall down and pick yourself up again, to think, 'I made a mistake but, hey, let's move on'."
Separately, The Health Behaviour in School-Aged Children (HBSC) report showed almost seven per cent of the 6,000 15 and 16-year-olds questioned had self-harmed over the past year.
Prof Fiona Brooks, head of adolescent and child health at the University of Hertfordshire, led the HBSC investigation.
"Our findings are really worrying, and it [self-harm] is considerably worse among girls," she told The Guardian.
"At age 11, both girls and boys report a good level of emotional wellbeing. But by the age of 15, the gap has widened and we get 45 of boys."
She said factors such as stress at home, pressure to get the grades for university and the lack of a 'guarantee of a job at the end of it all' can all contribute to poor mental health.
She said young people are 'turning to strategies such as self-harm to manage stress in the short term'.
Prof Brooks added: "Although there has been a decline in traditional risk behaviours like smoking and drug and alcohol abuse, there hasn't been a transition to more positive health behaviours."
For more information, visit NHS.uk.