According to the first Australian Industry Group-Deloitte national survey, based on responses from about 500 chief executives in the manufacturing, services and construction sectors, the majority (68.1%) claimed that a lack of skills has affected their business in the past year.

Skills shortages are reportedly most prevalent in the construction and services sectors, and among large companies.

For CEOs, the number one business strategy for success was competitiveness and growth, followed by innovation.

Heather Ridout, CEO of the Ai Group, pointed out that "Australian business are extremely aware of the importance of skills to innovation".

In addition, trained and up-skilled employees are a key strategy for increasing ingenious approaches and creativity in their company.

Around 250,000 full-time skilled workers are needed to satisfy business needs, but there are still major obstacles preventing upskilling, namely costs, and the departure of staff following training.

Ms Ridout said that the study has found that a large number of Australian companies - in trying to improve innovation - have adopted specific business management practices. This inlcudes creating a culture of information-sharing, using incentives and applying measures to foster employee knowledge.

The survey also showed the need for the Federal Government to consider solutions aimed at lifting the skills and capabilities required for innovation in Australian companies.