The New Silk Road
Centuries ago, the Silk Road played a critical role in connecting East and West through trade, culture, and politics. Today, that historic network has been revived, and two decades into its rebirth, the New Silk Road presents dynamic opportunities.
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What's Next
Action steps for the private sector and governments
step 1
Tackle Internal Silos
Firms operating successfully across the New Silk Road have overcome organizational silos based on geographical divisions, such as between Asia and the Middle East
View LeversLevers
- Establish country-desks to build bridges between geographical locations
- Design incentive structures to motivate sharing of opportunities or intelligence
- Establish senior stakeholder teams able to ‘pick up the phone’ with other geographical locations and break silos
step 2
pick your opportunities
Opportunity sets will look different to before, as they will require comparing a larger number of state and private sector actors across regional value-chains
View LeversLevers
- Establish a multi-region strategy unit empowered to explore cross-market opportunities
- Cultivate front-line employees and commercial partners as a source of market intelligence on fast-growing markets
- Focus on specific growth or trade corridors as an initial test and learn, rather than boiling the ocean and losing momentum
step 3
Align with national priorities
National priorities and long-term state development strategies are a bigger driver of the region’s opportunities compared with Europe and the United States
View LeversLevers
- Ensure strategy and management teams are fully aware of the governments’ economic and business priorities in target countries
- Engage regularly with national planners and officials to understand the rationale behind policies and plans
step 4
Manage your talent
Talent able to work effortlessly across multiple markets, such as by having the right connections or language capabilities, is in short supply and must be nurtured
View LeversLevers
- Offer greater mobility opportunities between key business hubs to develop multi-country/regional expertise
- Strengthen talent and development programs owing to talent shortages in key business hubs, such as Dubai and Singapore
step 5
Find the right partners
Local partners are key to navigating the region’s diverse markets and customs, as well as demonstrating a firm’s commitment to nurturing domestic growth
View LeversLevers
- Navigate localized markets, including understanding regulations and consumer preferences, by working with local partners with shared interests
- Seek local partners that are aligned with government priorities and so can accelerate market entry and success
step 6
take advantage of technology
Technology is helping to remove barriers to trade and investment between the region’s many countries, with the New Silk Road itself also a major source of technological innovation
View LeversLevers
- Explore where generative artificial intelligence may help to customize global solutions for local markets and help ease talent shortages
- Strategically adopt technologies to reduce the friction of intra-regional flows, from digital payments to information sharing
step 7
Follow the investment flow
The New Silk Road’s opportunities are not always apparent in data or in public information, as they are often private flows, making it important to develop region-wide networks
View LeversLevers
- Develop firm-wide intelligence capabilities using interpersonal contacts, inside and outside the firm, to identify changes in business flows
- Stay open to partnership or platform opportunities, as they expand information networks and help identify or assess opportunities
step 8
Optimize supply chain
The New Silk Road is the world’s largest manufacturer and the relocation of supply chains across the region is creating new opportunities to build resilience and tap into new growth markets
View LeversLevers
- Develop China+1 strategies and rebalance sourcing footprints to ensure resiliency in the event of worsening geopolitics
- Collaborate with Chinese manufacturers seeking to develop global footprints and more durable business models
step 1
Revisit trade and investment agreements
The New Silk Road is home to two of the world’s three world-class regional trade agreements and governments are committed to expanding the scope and quality of bilateral free trade agreements (FTAs)
View LeversLevers
- Negotiate to join multilateral FTAs, such as the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and only selectively negotiate new bilateral FTAs or update existing agreements
- Ensure bilateral or multilateral FTAs cover the full scope of a modern economy’s activity, including capital, data, talent, and technology flows
step 2
Leverage sovereign wealth funds (SWFs)
The region’s SWFs are among the world’s largest and most active, often making investments that support national growth priorities and nurture local champions
View LeversLevers
- Deploy SWFs to support national agendas by acquiring capabilities and technologies or by plugging into the region’s value chains
- Employ SWFs to solidify partnerships between countries by directing investments towards partner countries’ strategic priorities
step 3
Facilitate trade, investment, and technology flows
Governments can help shape the regional agenda on issues of common importance, to both build grounds for greater сollaboration between countries and support national priorities
View LeversLevers
- Expand cross-regional research efforts into areas such as vaccines, energy, and space, to expand efforts and build grounds for collaboration
- Enhance participation in multinational agencies to set agendas and guide flows of capital, talent, and technology in support of national priorities
step 4
Deploy development funds
The New Silk Road has an opportunity to expand the role of development funds as a complement to existing multilateral funds and to solidify relationships between countries
View LeversLevers
- Deploy development funds to build trust between countries by supporting partner countries’ development needs and the wellbeing of their citizens
- Target funding for areas of mutual benefit by, for example, using funding to support joint research on climate change or health initiatives
step 5
Support the private sector
Governments play an important role in assisting the private sector to open up new markets or remove obstacles to further growth, with trade agencies playing a leading role
View LeversLevers
- Ensure regular high-level official contact to open doors for the private sector in regional markets, particularly those that are less transparent
- Establish trade and investment agencies to help the private sector identify opportunities in regional markets and make the right connections
step 6
Activation and monitoring
Governments need to activate and monitor the performance of economic agreements to ensure counterparties are fulfilling terms and private companies are maximizing opportunities
View LeversLevers
- Establish joint taskforces to develop and execute action items, identify synergies, remove roadblocks, and improve outcomes
- Ensure robust monitoring of progress to provide joint taskforces with greater visibility and enforce departmental and individual accountability
What's Next
Action steps for the private sector and governments
step 1
Tackle Internal Silos
View Leversstep 1
Tackle Internal Silos
Firms operating successfully across the New Silk Road have overcome organizational silos based on geographical divisions, such as between Asia and the Middle East
Levers
- Establish country-desks to build bridges between geographical locations
- Design incentive structures to motivate sharing of opportunities or intelligence
- Establish senior stakeholder teams able to ‘pick up the phone’ with other geographical locations and break silos
step 2
pick your opportunities
View Leversstep 2
pick your opportunities
Opportunity sets will look different to before, as they will require comparing a larger number of state and private sector actors across regional value-chains
Levers
- Establish a multi-region strategy unit empowered to explore cross-market opportunities
- Cultivate front-line employees and commercial partners as a source of market intelligence on fast-growing markets
- Focus on specific growth or trade corridors as an initial test and learn, rather than boiling the ocean and losing momentum
step 3
Align with national priorities
View Leversstep 3
Align with national priorities
National priorities and long-term state development strategies are a bigger driver of the region’s opportunities compared with Europe and the United States
Levers
- Ensure strategy and management teams are fully aware of the governments’ economic and business priorities in target countries
- Engage regularly with national planners and officials to understand the rationale behind policies and plans
step 4
Manage your talent
View Leversstep 4
Manage your talent
Talent able to work effortlessly across multiple markets, such as by having the right connections or language capabilities, is in short supply and must be nurtured
Levers
- Offer greater mobility opportunities between key business hubs to develop multi-country/regional expertise
- Strengthen talent and development programs owing to talent shortages in key business hubs, such as Dubai and Singapore
step 5
Find the right partners
View Leversstep 5
Find the right partners
Local partners are key to navigating the region’s diverse markets and customs, as well as demonstrating a firm’s commitment to nurturing domestic growth
Levers
- Navigate localized markets, including understanding regulations and consumer preferences, by working with local partners with shared interests
- Seek local partners that are aligned with government priorities and so can accelerate market entry and success
step 6
take advantage of technology
View Leversstep 6
take advantage of technology
Technology is helping to remove barriers to trade and investment between the region’s many countries, with the New Silk Road itself also a major source of technological innovation
Levers
- Explore where generative artificial intelligence may help to customize global solutions for local markets and help ease talent shortages
- Strategically adopt technologies to reduce the friction of intra-regional flows, from digital payments to information sharing
step 7
Follow the investment flow
View Leversstep 7
Follow the investment flow
The New Silk Road’s opportunities are not always apparent in data or in public information, as they are often private flows, making it important to develop region-wide networks
Levers
- Develop firm-wide intelligence capabilities using interpersonal contacts, inside and outside the firm, to identify changes in business flows
- Stay open to partnership or platform opportunities, as they expand information networks and help identify or assess opportunities
step 8
Optimize supply chain
View Leversstep 8
Optimize supply chain
The New Silk Road is the world’s largest manufacturer and the relocation of supply chains across the region is creating new opportunities to build resilience and tap into new growth markets
Levers
- Develop China+1 strategies and rebalance sourcing footprints to ensure resiliency in the event of worsening geopolitics
- Collaborate with Chinese manufacturers seeking to develop global footprints and more durable business models
step 1
Revisit trade and investment agreements
View Leversstep 1
Revisit trade and investment agreements
The New Silk Road is home to two of the world’s three world-class regional trade agreements and governments are committed to expanding the scope and quality of bilateral free trade agreements (FTAs)
Levers
- Negotiate to join multilateral FTAs, such as the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and only selectively negotiate new bilateral FTAs or update existing agreements
- Ensure bilateral or multilateral FTAs cover the full scope of a modern economy’s activity, including capital, data, talent, and technology flows
step 2
Leverage sovereign wealth funds (SWFs)
View Leversstep 2
Leverage sovereign wealth funds (SWFs)
The region’s SWFs are among the world’s largest and most active, often making investments that support national growth priorities and nurture local champions
Levers
- Deploy SWFs to support national agendas by acquiring capabilities and technologies or by plugging into the region’s value chains
- Employ SWFs to solidify partnerships between countries by directing investments towards partner countries’ strategic priorities
step 3
Facilitate trade, investment, and technology flows
View Leversstep 3
Facilitate trade, investment, and technology flows
Governments can help shape the regional agenda on issues of common importance, to both build grounds for greater сollaboration between countries and support national priorities
Levers
- Expand cross-regional research efforts into areas such as vaccines, energy, and space, to expand efforts and build grounds for collaboration
- Enhance participation in multinational agencies to set agendas and guide flows of capital, talent, and technology in support of national priorities
step 4
Deploy development funds
View Leversstep 4
Deploy development funds
The New Silk Road has an opportunity to expand the role of development funds as a complement to existing multilateral funds and to solidify relationships between countries
Levers
- Deploy development funds to build trust between countries by supporting partner countries’ development needs and the wellbeing of their citizens
- Target funding for areas of mutual benefit by, for example, using funding to support joint research on climate change or health initiatives
step 5
Support the private sector
View Leversstep 5
Support the private sector
Governments play an important role in assisting the private sector to open up new markets or remove obstacles to further growth, with trade agencies playing a leading role
Levers
- Ensure regular high-level official contact to open doors for the private sector in regional markets, particularly those that are less transparent
- Establish trade and investment agencies to help the private sector identify opportunities in regional markets and make the right connections
step 6
Activation and monitoring
View Leversstep 6
Activation and monitoring
Governments need to activate and monitor the performance of economic agreements to ensure counterparties are fulfilling terms and private companies are maximizing opportunities
Levers
- Establish joint taskforces to develop and execute action items, identify synergies, remove roadblocks, and improve outcomes
- Ensure robust monitoring of progress to provide joint taskforces with greater visibility and enforce departmental and individual accountability
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