Sometimes, we invest more only to stand still.

The product gets more features, more colors, and more promotions. But when everything becomes a race, everyone works harder, yet no one necessarily creates more value.

China has that problem today. Relative to the size of its economy, it has 1.7 times as much productive capital as the United States or the EU. Yet the value it extracts from that capital is about 40% lower, the McKinsey Global Institute found. Chinese companies invest more and compete more fiercely, while many struggle to make money.

In China, people call this pattern neijuan—literally, “involution”: everyone works harder, yet the returns keep falling.

Neijuan isn’t just a Chinese phenomenon. It’s all around us:

• We post more on social media, while engagement declines.
• We make more things with AI, but most look the same.
• We collect more qualifications, yet each one is less valuable.
• We answer emails instantly, but don’t get more done.

Business theory has long told us that more competition is always good. Compete harder, innovate faster, work longer—to win the race.

But is it the right race?

Cirque du Soleil chose a different race. For decades, running a circus meant adding bigger acts, more animals, and more discounts. In 1984, Guy Laliberté and Gilles Ste-Croix decided not to enter that race. Instead, they eliminated animals, blended circus with theatre, and created Cirque du Soleil—a completely new experience that audiences were happy to pay a premium for.

Winning the race still matters. The smarter move is to choose a race where effort pays off.

When we choose a better race, involution becomes innovation.