AbstractThe global economic landscape has recently undergone significant changes, marked by the rise of neo‐protectionist policies and the emergence of a new techno‐economic paradigm driven by smart automation technologies such as artificial intelligence and robots. Advanced nations have increasingly used neo‐protectionism and smart automation technologies to address their structural problems. These policies will inevitably trigger changes in global supply chains and trade networks. This could undermine the competitive advantages of catch‐up nations, and an economic growth strategy centred on foreign direct investments. While these changes in the global economy may have negative impacts on the economic progress of some catch‐up countries, they may open new windows of opportunity for others. This article examines the challenges and opportunities for catch‐up nations in an era of neo‐protectionism and smart automation technologies.