I'm reading the document a bit different. It is not so much about lack of competitiveness as it is about centralizing policy making and power in the EU organization, aka "all problems can be solved by giving EU institutions dictorial power over everything".
E.g. making sure all military purchases are done centrally (aka EU army).
All the text about GDP, R&D and AI is just window dressing for this goal.
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The summary on page 2 give the reasons: 1) Lack of focus (regulatory burdens + single market not implemented fully), 2) (military) spending power not made centrally, 3) policies are too cordinated and should be set top-down instead for quicker decisions.
The details on page 11 argue: 1) energy prices too high (doesn't specify why this is important in high-tech production and if this is a problem for all the datacenters in EU, just states it as a fact) 2) "pipeline from innovation to commercialisation" doesn't work 3) reduce supply line dependency from countries outside EU.
Page 12 says it almost directly: "To move forward, Europe must act as a Union in a way
it never has before". I.e. EU should no longer be a union of countries but be more like union of states, likely even less power than the states in the US.
Page 21 (and 27-30) talks about AI as a silver bullet that will magically improve car production etc.
While it talks about reducing regulatory burden, it completely overlooks how difficult it is to find out what laws applies to a given area. Lack of transparency is a huge overhead.
It also thinks that patents and revenue sharing with researches will increase innovation while completely ignoring how research is hampered by "publish or perish".
It should talk about how to get Germany to invest in better internet connections for homes and how to modernize hospitals etc so the no longer use FAX machines.