E-skills blames an uninspiring curriculum for putting young people off the subject early on. The organisation also says "misperceptions" contribute to a lack of interest, with students "assuming that IT is concerned with computers not people, is dull and repetitive, and is not well paid".
Margaret Sambell, director of strategy at e-skills, said, "We believe that a radical review of the technology curriculum in schools is essential.
"In order to compete in the technology intensive globalised economy, we need an inspiring curriculum in schools that attracts increasing numbers of talented students into technology-related degrees and careers."
She added that the curriculum needs to be rebuilt with input from employers and universities. It is hoped the new IT diploma, developed in conjuction with employers, will encourage more students to take IT.
The number of students taking computing A-level has plummeted 50% in the last five years and just 5,068 pupils took the course this year, which was 10% less than in 2007.
GCSE IT suffered a 14% decline compared to 2007 with 85,599 students sitting the exam.
Universities have experienced similar problems, with 50% fewer students taking IT related degrees than in 2003.