15/03/2012 07:48 GMT | Updated 14/05/2012 06:12 BST

English - The UK's Blessing and Curse

A very senior business leader told me recently that he saw languages as the new STEM. The STEM subjects - science, technology, engineering and mathematics - are deemed to be of strategic importance to the economy and are funded more generously by the government. He believed it time to add modern foreign languages to the list.

His company is one of the largest graduate employers in the UK and yet the importance business and industry now puts on languages and a global outlook is clearly not penetrating to students. The number of pupils sitting a language GCSE fell from 444,700 in the summer of 1998 to 273,000 in 2010 and the latest figures from UCAS show a 21% decline in university applications for non-European languages and an 11 per cent fall for European languages. Only around 1,233 students applied for non-European languages, out of a total pool of 560,565 applicants. Applications for Japanese have fallen by 35% and even Chinese is down by 2%, despite the increased teaching in schools.

At the heart of the matter is English, the UK's blessing and its curse. Our national language is a blessing because it has evolved and continues to evolve as a powerfully expressive tool full of surprise and joy, exuberant in its transformations but rooted in an extraordinary past. English is also our curse because is has become the business lingua franca. English is the Martini of languages - anytime, anywhere, anyplace.

This form of business English is a dangerous limitation on understanding of culture. It lends a false optimism that one understands the deal or the business or the sale that is taking place. It pretends that all consumers think alike; that what works here should work there. But an engineer who can speak Cantonese to her Guangzhou counterpart is clearly at an advantage, as is a web designer writing in Cyrillic to a St Petersburg design company. Sometimes Google Translate just isn't enough. Not only does a language help in business-to-business transactions, it also provides deep insight into understanding consumers. Living in a country makes selling to consumers in that culture a great deal easier.

There needs to be a clearer message from companies, government and universities to young people about the increasingly global - both physical and virtual - nature of employment and that success in their careers will increasingly flow from having an international outlook. The importance of encouraging a global outlook in young people and academics will be a key theme of the British Council's Going Global conference in London this week. The British Council's recent Next Generation UK report, prepared by YouGov, found young people in the UK are cosmopolitan and have a strong awareness of the rest of the world but fewer than half thought that having an international outlook would aid their prospects in study or work. Asked about the benefits of having an international outlook, improving their employment and career prospects was near the bottom of the list.

By contrast, a parallel piece of research with employers - The Global Skills Gap - found three quarters worried that young people's horizons were not broad enough for them to operate effectively in a globalised and multicultural economy. So what do employers want? The Council for Industry and Higher Education surveyed leading employers, who collectively recruit more than 3,500 graduates each year across a range of sectors. The report, Global Graduates into Global Leaders, found that top of the list was the desire to recruit people who are ready, willing and able to work in teams with people from different cultures and backgrounds to achieve identifiable business ends. Getting the best out of each other in today's business environment means that employees have to have the mindset of cultural anthropologists and who can 'translate' their international colleagues' actions. 'Understanding' is a key competitive advantage, but students do not necessarily achieve it by travelling around with their mates on a gap year. Recruiters are looking for people able to show that they have thought about global challenges and the opportunities facing business, and who are eager to work with others across international teams to grow the company. Little Englanders need not apply.

Although speaking any particular language is not top of the recruiters or talent manager's list of competencies - given that in any given business you might be dealing with multiple languages at any one time - learning a language obviously makes cultural insight far easier to achieve. In an era when much of the value in industries like manufacturing will come from technically advanced aftersales, services, where the business in effect rents the product from a service provider, relationship management is that much more important. This means languages and understanding become a factor of production, and therefore the pool of talent is strategically important for the UK.

STEM has quite correctly accumulated significant government funding and support over the past 10 years, but my business colleagues are posing significant questions about the cultural awareness of the UK's global graduates and the potential strategic gap between what they need to operate successfully in business and what our system is producing. The three partners in the delivery of higher education in the UK - government, universities and colleges, and business - must address themselves to new STEM challenge and help ensure that the UKs graduates are the global business leaders of the future.