// . //  Insights //  How The New Silk Road Leads The Way In Digital Disruption

The New Silk Road has emerged as a digital disruptor. Factories and oil fields might have best described the region’s economic activity a decade ago, but it is now home to leading digital players and content creators. The image of young Emiratis watching videos of the South Korean girl group Blackpink on Chinese-owned TikTok is a neat illustration of this emergence. The changes underway have the potential to radically redefine what the New Silk Road means for the rest of the world. It is no longer simply an exporter of consumer goods or crude oil, but also a force for change in how we interact with the digital world.

Exhibit: The New Silk Road has emerged as a digital disruptor
Exhibit: The New Silk Road has emerged as a digital disruptor

1India, Indonesia, Hong Kong SAR, Singapore, UAE

Source: United Nations Population Division, Oliver Wyman Forum analysis

The region’s 1.1 billion young people – those between the ages of 15 and 29 – are accelerants for change. This age group, better known collectively as Generation Z (Gen Z), are engaging with the world around them in ways not available to previous generations. They are making use of low-cost smart devices, affordable mobile data plans, and a proliferation of local apps and content creators. The region’s digitally savvy Gen Zs are changing the way we work, shop, and consume content, echoing much of the change being brought by Gen Zs globally. Moreover, while our New Silk Road series might focus on conventional subjects, such as finance or supply chains, it is youth-led digital disruption that is especially exciting.

Asia is a major source of this digital disruption, from digital games to short-form videos. However, the Middle East’s ambition to invest in its own digital creative industries will not only accelerate the pace of change, but also its own connectivity with Asia.

Four opportunity areas for investing in the New Silk Road’s digital disruption

A digital gaming boom

The region is already a vast consumer and producer of digital games, and these are a growth priority for the Gulf Cooperation Council (GCC) governments. The region’s gaming industry has enjoyed rapid growth over the past decade, accounting for five of the world’s Top 10 gaming companies by revenue. Moreover, Chinese, Japanese, and South Korean gaming companies will continue to lead regional and global game development. The New Silk Road will also remain a driver of industry versatility, from consoles to mobile pay-to-play games, as developers must target a wide range of income levels, from the Philippines to Qatar.

Look for the GCC’s entry into the gaming world to further expand the region’s influence on the global gaming industry. Saudi Arabia has positioned e-gaming as a national growth pillar, aiming to nurture 250 gaming companies and 35,000 jobs. The UAE has equally ambitious plans. At the same time, tie-ups between the Asian and Middle Eastern gaming industries have accelerated rapidly via investment deals and licensing arrangements.

The entertainment wild card

The rise of new entertainment platforms will trigger greater diversity in how the region’s content is both created and consumed. The New Silk Road has a vibrant and growing entertainment business: K-pop bands such as Blackpink are global leaders, attracting crowds of 25,000 when they performed recently in Riyadh; Turkish soap operas are similarly popular across the Middle East and parts of Asia; India’s US$1.5 billion film industry is wildly popular among expatriates and local populations; and China’s film industry has overtaken the United States’ gross box office.

The region’s high digital adoption rates and the content shift from conventional providers to streaming platforms – more recently platforms such as TikTok – will turbocharge the New Silk Road’s entertainment industry. Expect a greater diversity of digital entertainment options, with established streaming channels already offering significantly more content from countries such as South Korea and India.

Generative artificial intelligence (AI) as a creative disruptor

Generative AI will expand the range of opportunities, from digital games to short-form videos, and enable more customization and localization. The rise of generative AI will amplify the opportunities in gaming and entertainment. In gaming, the technology will permit more dynamic game worlds, enabling users to develop their own content, ideal for a region with multiple cultures, languages, and preferences. An Indonesian gamer, for example, would be able to customize a Chinese-developed game by adding non-playing characters (NPCs) influenced by local Indonesian trends.

Generative AI could also expand what small studios can achieve when designing games for local markets, such as Egypt or Thailand, alongside the more established Japanese console and Chinese pay-to-play developers. The same is true for the entertainment industry, as generative AI allows studios to easily facilitate the dubbing of Japanese anime into local languages or develop their own local versions for sharing on short-form video platforms.

Turbocharged digital sales

A mixture of virtual influencers, e-commerce sales, and a digitally savvy market of young people will disrupt the region’s traditional sales channels. The convergence of short-form videos, online influencers, and digital sales is a more recent phenomenon, with its origins in the New Silk Road. TikTok and its Chinese version Douyin are the region’s success story so far. However, other local competitors are emerging. In the race to sell to the region’s 4.3 billion consumers, digital sales will continue to grow as a sales channel, particularly when targeting the region’s large populations of young people.

Mobile gaming and entertainment will offer additional sales opportunities. Purchasing new skins or weapons while playing Chinese mobile games and buying branded merchandise when watching a Japanese anime streaming channel are already possible. Nevertheless, look for greater cross-platform integration, even as generative AI makes it easier to translate content between markets or localize AI-generated sales influencers.

This article is part of our New Silk Road series