Building a Technological Change Index for Developed and Developing Countries: A New Multidimensional Measure

In the economics literature, many indicators are used as proxy variables for technological change. However, most of these indicators generally overlook the complex and multidimensional nature of technological change. In this context, we develop a new composite indicator by applying multivariate statistical methods to determine the level of technological development. This new index, called the Technological Change Index (TCI), reflects various dimensions of technology, including infrastructure, access and use, innovation, and impact. It has been calculated using 13 normalized indicators. Each indicator belonging to these dimensions was weighted using Principal Component Analysis (PCA), and the leading factors contributing to technological change were identified. The main purpose of building this index is to determine the level of technological change in countries and, thus, to reveal the gaps in technological development across the world. The scores of the TCI, which cover a total of 46 developed and developing countries, provide useful insights for researchers and policymakers focusing on development issues.