If the technology sector thrives on skills, then it could be on the verge of starvation. Poor perceptions of the IT industry are choking off the supply of employees with competent IT skills - and it is a global problem.

In the UK, a report by Lancaster University School of Management and the British Computer Society revealed that applications for computer science degree courses have dropped by half in the past five years. Software engineering applications have fallen by 60 per cent.

In Canada, things are not much better, according to the council organised by the government to monitor and promote the development of IT skills. Canada will need 89,000 new IT professionals in the next three to five years, warns the Information and Communications Technology Council, "yet enrolments in IT courses have dropped by 50-70 per cent because of the negative view of the IT sector," explains Paul Swinwood, president of the ICTC.

Not only are the number of new applicants dropping, but "in about five years, demographics suggest that the number of 14-18 year-olds available will start dropping as well," warns Dr Mike Rodd, director of external relations for the BCS.

"The gap is emerging at the higher end, where you want computer science graduates who are able to do more of the design and specification - the software analyst stuff," he continues. This is creating a perfect storm for the IT sector, because experts on both sides of the Atlantic suggest that it is precisely these skills that are becoming more necessary.

"The balance of skills required to work in IT has changed radically," explains Karen Price, chief executive of eSkills UK, the ICTC's UK equivalent. "The purely technical is no longer sufficient, and so it's introducing more customer focus and business skill into the mix."

eSkills UK is working on a diploma to help raise skills in the education system. Aimed at 14-19 year-olds, the diploma in IT will be available to schools in 2008.

The national curriculum's "Skill for Life" IT component is designed to provide students with skills that will enable them to work in an office, such as using spreadsheets and word processors, whereas the diploma is intended to provide a more extensive grounding in technology for business use, mixing academic and applied IT education, says Ms Price.

But will there be enough teachers to make it work? A recent report from the National Foundation for Educational Research revealed that science teachers at secondary level often did not have specialist education in the subject. While three out of four mathematics teachers were specialists, only one in four chemistry teachers were, and only one in five physics teachers.

In the US the problems are different, says Ian McEwan, who is responsible for organising North American events at the multinational scientific educational charity, First. He is worried about the level of knowledge among school leavers and attributes the problem in part to the fragmentation of the educational system.

"We're failing by not bringing these kids up with the basic stuff that you need to exist these days. They get on to MySpace and download songs from iTunes, but I'm not sure that we can teach them the fundamentals," he says.

Application knowledge is one thing, and can be acquired at any stage, but in his experience many new high-school graduates do not understand basic principles such as file structure and the workings of e-mail.

The Tenth Amendment means that the US government delegates much educational policy to state level. "It's almost a school district by school district thing," says Mr McEwan.

That can make it difficult to create a standard focus on IT in schools across the country.

First is an organisation that brings in scientists and engineers from industry to act as mentors in schools, running events such as robot-building workshops with Lego to help rekindle children's enthusiasm in IT.

"Today you have teachers who aren't computer-savvy and so don't understand,and can't relate," says Mr McEwan, adding that First has had to run classes for teachers in drag-and-drop programming for the Lego events because they arelagging so far behind the students.

Co-opting private enterprise appears to be a standard approach to achieve two goals: getting students excited about IT again, and helping to tailor IT students to suit employers' needs. In both the US and Canada, the governments have created councils to foster links with industry and hammer out the problems.

e-Skills UK is working with private enterprise to build the diploma and its IT Management for Business honours degree programme, which aims to help create computing graduates with more business-focused IT skills.

Some universities, such as Hull, are also working with the private sector. Hull has set up software development houses with students working on real commissions, explains Dr David Grey, director of undergraduate studies for its Computer Science department. This gives students experience that will help them succeed in their first IT job.

In Canada, the ICTC is also co-opting private sector organisations and community colleges as close to the client base as possible.

"We're bringing together the engineers, the technicians and the technologists; my council, the Canadian Information Processing Society, and your local IT associations," says the ICTC's Mr Swinwood. "We can have a national programme but we need feet on the ground, in the community."

Creating a link between high-level policy and direct action is crucial if IT education is to be effective in schools. The difficulties the sector faces in terms of generating appropriate skills are inseparable from its own success. For many teachers who advise young people, it moves too quickly and unpredictably for comfort.

This is why the BCS's Mr Rodd has been horrified to see some teachers advising students against careers in IT, citing the uncertainty caused by the bursting of the dotcom bubble.