SAN FRANCISCO (AP) — More attention must be paid to the California State University system and to the state's community colleges if California is going to produce the educated workers its economy needs, Lt. Gov. Gavin Newsom says in a report issued Tuesday.

The report commissioned by Newsom argues that the state is losing its place as a national leader in higher education.

The report, prepared by the nonpartisan Committee for Economic Development based in Washington, D.C., finds that the percentage of young adults earning associate and bachelor's degrees in California already is below the U.S. average and predicts the trend will persist unless the system is overhauled to serve an increasingly diverse and low-income population.

"This policy statement points to our underperformance in developing the educated citizenry required for economic competitiveness and individual opportunity," Newsom said. "The magnitude of this underperformance is such that it will not be successfully addressed by modest injections of funding or by tweaks in current educational policy and practice."

Along with boosting graduation rates at Cal State and community college campuses, which enroll the vast majority of the state's college students, the study calls for greater collaboration with for-profit private colleges, employers and K-12 schools.

Lead author Patrick Callan, president of the Higher Education Policy Institute, said that if the state is serious about meeting its "productivity challenge," it will need to create "new kinds of institutions that take advantage of innovative instructional technologies and business plans to develop nontraditional ways of providing high-quality postsecondary education programs."

By virtue of his office, Newsom sits on the governing boards of the University of California and the Cal State system. He also is considered a likely gubernatorial candidate in 2018. He said he plans to initiate a series of discussions about the recommendations contained in the report over the next year.