The Small Firms Association has called for a radical shake-up of training for people in employment and the establishment of an employment training agency.
According to Mr Pat Delaney, assistant director of the SFA, an additional £50 million is needed to maintain growth in small business and attract inward investment from overseas industries.
Irish employers spend about 0.9 per cent of payroll of £150 million a year on training but this disguises significant gaps and variations in spending, he added.
"We desperately need a structured approach to manpower planning policy to sustain the growth in business. If we cannot supply properly trained staff into a competitive labour market we will lose out on investment and jobs."
According to SFA research, the small business sector is unhappy with the nationally-funded community employment training scheme, which many say is not sufficiently practical or work-related.
The association is recommending a three-pronged approach. National policy must be driven by the users rather than the suppliers and employers must both lead and direct it.
Employers must also be in a position to improve the quality and design of training programmes and they must also play a leading role in the development of a national framework for educational and vocational qualifications.
According to Mr Delaney, the commitment to allocate £9 million to small business under the training support scheme operated by FAS is "totally inadequate".
"This only represents £56 per company across the state's 160,000 small enterprises."
He added that an employment training agency should be established to take responsibility for policy formulation.
"The passive role played by employers had led to inadequate training, an imbalance in state support and a failure to influence and lead national training policies for the employed."
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