The indicator has the following components: A) the creation of technology (Patents and scientific articles); B) the diffusion of technology (Internet penetration, telephone penetration, and electricity consumption); C) the development of human skills (tertiary science & engineering enrolment, mean years of schooling and literacy rate). The paper calculates the index for a large number of countries. Daniele Archibugi and Alberto Coco, Italian Research Council, 11 June 2002.