Jaguar Land Rover has called for higher levels of investment to support companies in the manufacturing supply chain.
The British-based and Indian-owned automotive firm claims that a lack of finance in the sector is not only damaging the manufacturers themselves, but also the economy.
It has urged ministers to put investment in innovation at the heart of Government policy in order to remedy the situation.
By doing so, Jaguar Land Rover believes the economy can successfully be rebalanced and start to grow once again.
Speaking at the 2013 Manufacturing Summit hosted by the Department for Business, Innovation & Skills, Jaguar Land Rover executive director Mike Wright emphasised the need for more investment.
"It is investment in innovation that will make the difference to the growth in the UK economy," he said.
"If we are to rebalance and grow the UK economy, we need a continued focus on Government investment support for R&D, improved supplier access to finance and support for more engineering studies and skills-training."
In terms of improved access to finance, Mr Wright said it was particularly important for small and medium size enterprises.
According to the Organisation for Economic Co-operation and Development, Britain is currently ranked 17th in a table of how much countries invest in research and development as a percentage of gross domestic product.
This lack of finance, combined with a shortage of graduate engineers, is putting Britain at an economic and competitive disadvantage compared with other nations, Jaguar Land Rover said.
Mr Wright revealed that the luxury car maker is doing its bit to help rebalance the economy away from debt-fuelled spending and towards manufacturing and exports.
At present, the company is exporting around 85% of its goods. It has also created over 9,000 new jobs and invested nearly £10 billion in the British supply chain over the past two years.
But in order to continue making such a significant contribution, the executive director claimed Britain needed to produce more young people with the necessary skills to join the industry.
"If we don't do something about it, the sector is going to run out of good quality engineers which can't be the right thing," he said.
He claimed that schools should promote science, technology, engineering, and mathematics, as well as offering every pupil the opportunity to develop knowledge of electronics, systems and computer-aided design.
"This will help to inspire and encourage them to consider a career in engineering and manufacturing."
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