The U.S. Air Force has taken advantage of the widespread use of “fly-by-wire” (FBW) controls in its aircraft to collect data on exactly what actions pilots take under different conditions. That data has had many uses and one of them is to make flight simulators more realistic. This is especially useful in the most high-fidelity simulators that also replicate the motion of aircraft. This sort of fidelity was essential to perfect a flight simulator where pilots and boom operators of an aerial tanker could link the simulators each already have and carry out training previously only possible by actually taking the aircraft into the air and using another aircraft to pretend to get refueled. With FBW data it is possible to create a complete aerial refueling simulator for the first time. This simulator training system has proven so realistic that much less actual training in the air is required to reach the same skill levels.
Something like this was not a sudden development but rather a gradual development process. Both flight simulators and fly-by-wire flight controls have been around since the 1930s. But flight simulator technology advanced more quickly as did the use of flight simulators. FBW tech began to catch up in the 1980s with more and more aircraft completely replacing mechanical controls with FBW. This was a long-sought goal because FBW replaces complex mechanical linkages for flight controls with electronic commands sent over wire. FBW is more reliable, faster to respond and saves weight. Another advantage, that only became popular (or practical) in the 1990s was collecting data on all the commands that went through a FBW system during a flight.
Flight simulators have always led the way in simulator technology because aircraft have always been the most expensive equipment you have to train operators for. The development of flight simulators began in the 1930s. Back then, the simulators were much more primitive, and were used to teach pilots how to fly, and navigate, at night. It was much cheaper, and safer, to do this kind of training on the ground, via a simulator. Even today, the main emphasis with simulators is handling in-flight emergencies. Most actual missions tend to be rather uneventful most of the time. But many emergencies can crop up, if only rarely, so the pilots have a safe way to practice handling common, and not so common, emergencies via simulators.
New technology has made flight simulators a lot more effective and cheaper. Until the late 1990s a realistic combat flight simulator cost about as much as the aircraft it was simulating. While that did reduce the cost (per "flying" hour) of pilots practicing, it was not enough of a savings to make it practical for less wealthy countries to get these simulators and use them heavily. Thus we had a continuation of the situation where countries could scrape together enough money to buy high performance aircraft, but not enough to pay for all that flight time needed to make their pilots good enough to face aerial opponents (especially the Americans).
The new generation of simulators cost up to a tenth of the price of the aircraft they simulate. Suddenly, countries like China can buy dozens of simulators, and give their pilots enough realistic training to make them a threat in the air (at least to Western pilots). Each of these simulators can be run about 6,000 hours a year. While a hundred hours a year in a simulator isn't a complete replacement for a hundred hours of actual air time, it's close enough if the training scenarios are well thought out. And another 40-50 hours of actual air time a year gives you a competent pilot. Add another few hundred hours using commercial (game store bought) flight simulators (especially when played in groups via a LAN), and you have some deadly pilots.
The cheaper and more powerful simulator technology has made it possible to build simulators for larger aircraft, with larger crews. The U.S. Navy is using a P-8A (maritime patrol aircraft) full-flight simulator that can accurately replace flight training in an actual aircraft. For the last few decades, simulators have been increasingly replacing training in the air. Even the U.S. Army is using such simulators to train the crew of transport helicopters. The navy has built simulation software into its ships combat systems, allowing weapons crews to train together under realistic conditions without actually firing the expensive missiles they use.
Back in 2010 Israel even formed a training squadron that consisted solely of flight simulators. The eight Israeli made simulators, each with an F-16 cockpit and all-encompassing video displays, are used to train groups of pilots in combined combat exercises. In these situations, two of the simulators are used to represent enemy aircraft. By having all the simulators in one place, communications problems would be eliminated. For several decades now, simulators participated in these joint exercises, even though each simulator would be in a different location. But this could be disrupted if there were problems with the communications link. This could either be (rarely), the link going down. More commonly, the link would slow down the signals, which meant pilots were out of sync, and the illusion of operating in the same air space was degraded. Israel is also moving all its flight simulators to one air base, both to make maintenance easier and to deal with these communications risks. As a small country, putting all the flight simulators in one place does not put a big travel burden on pilots. Pilots using this system obtain valuable skills cheaply. These new skills are tested and verified the next time the pilots go up in the actual aircraft.