Lord Digby Jones said there were not enough skilled workers in Wales and called for the UK's immigration policy to be used to address the issue.
He also criticised the standard of education offered which he said had "failed the people of Britain".
The Home Office wants bosses to get "far better" at recruiting UK workers.
Lord Jones spoke out as figures from the Office for National Statistics showed 641,000 people immigrated to the UK in 2014, up from 526,000 in 2013.
He told BBC Radio Wales Britain should remain in the European Union if member countries can focus on education and training to arm migrant workers with skills.
"The United Kingdom and, indeed, south Wales particularly, does not have enough skilled people," said the former head of the Confederation of British Industry.
"So the immigration policy of the nation should start there. It should start with the fact we want more and better-skilled people.
"So regardless of the colour of their skin, regardless of the god they worship, regardless of where they come from in the world... if they've got a skill and a job to go to with a sponsoring employer, frankly, we should say 'you're welcome'."
Lord Jones, a former skills envoy, said the education policies of central and devolved governments have "failed the people of Britain".
"Just under half the people at 16 are coming out of school unable to read, write and count to the standard expected of 11-year-olds," he added.
"And it knocks on to the fact - if you're going to compete in a global economy you have to win on adding value, being innovative and delivering quality."
A Home Office spokesman said: "In the past it has been too easy for some employers to bring in workers from overseas rather than to take the long-term decision to train our workforce here at home.
"As the prime minister said in parliament, we need to do more to change that, which means reducing the demand for migrant labour. That is why we have commissioned the Migration Advisory Committee to provide advice on significantly reducing economic migration from outside the EU.
"Our reforms will ensure that employers are able to attract the skilled migrants they need, but we also want them to get far better at recruiting and training UK workers first."
Skilled migrants should be recruited by the UK government to plug a current shortfall in Wales, an ex-trade minister has said.