The government should stop talking up the opportunities for the UK digital sector and the "silicon roundabout", and concentrate more on the employment opportunities in engineering, according to the entrepreneur Sir James Dyson.

The industrial designer made the comments as the company he founded under his own name announced a 19% increase in annual profits to £364m and announced plans to recruit 650 new engineers, 250 of whom would be found in Britain.

Determined to push for even more innovation, Dyson said he was increasing the company's spending on research and development (R&D) by 25% this year. The company already spends £1.5m a week.

"We hear a lot about Silicon Roundabout, but companies such as Facebook employ 4,000 people whereas Caterpillar [the tractor and digger manufacturer] has 150,000. Companies like mine, or Jaguar Land Rover, are booming. I am recruiting 650 highly trained engineers and scientists now but I could take on 2,000 if I could find them," he said.

Dyson said that 50% of his company's £1.2bn sales in 2012 came from recently invented technologies, such as those employed in digital motors and cordless vacuum cleaners. The growth and success of the business was constrained only by a lack of skilled staff, he said.

"The government has done everything we asked for in our Ingenious Britain [policy blueprint] in the way of R&D tax incentives and the rest. But we can't get enough engineers – 88% of postgraduate students in Britain are from outside the EU and they are taking their technology skills back home with them. We need [ministers] to talk up the opportunities in engineering at every opportunity."

Dyson will be paying its new postgraduate British recruits £33,000 a year plus a £3,000 "golden handshake" to work at the firm's head office and R&D base in Malmesbury, Wiltshire.

The firm switched its manufacturing to Singapore and Malaysia in 2002 but said the advantage was not the cost of wages or equipment but the huge local supply chains that made it easy to source parts.

Dyson has just spent £150m on a new high-tech motor plant in Singapore. The entrepreneur insisted he had moved assembly functions overseas because he had been refused planning permission to increase the size of the Malmesbury plant, although trade unionists said he was looking at the time for cheaper labour.

Dyson said the company remained British and although the washing machines, vacuum cleaners and hand dryers were assembled in Asia, the exports were all billed through the UK.

In 2012 the company paid £65m in domestic corporation tax although it now sells all over the world, with Japan one of its fastest growing markets. The firm's upright vacuum cleaner was becoming a brand leader in the US, Dyson said.

He added that there was nothing stopping British engineering firms being world leaders but the key was to spend heavily and carefully both on new designs and products.

When Dyson was manufacturing in Wiltshire, the company was making 800,000 machines a year but that number has now reached up to 9m.

Dyson said he was also worried that new thinking was absent from the energy debate in Britain. He said he remained highly sceptical about the value of windfarms and believed the government should invest in new forms of nuclear power.