Technological innovation is proxied using the TAI, which is a measure introduced by the UNDP in its Human Development Report of 2001. The TAI aims to capture how well a country as a whole is participating in creating, using and diffusing technology and in building a human skill base to acquire knowledge. A nation’s technological achievements are very complex and, therefore, it is difficult to capture them in a single index that reflects the full range of technologies and which quantifies all aspects of technology creation, diffusion and human skills. Hence, it is a good measure of technological innovation when viewed as absorptive capacity since it captures both potential absorptive capacity and realised absorptive capacity. In order to create as broad an index as possible,however, the TAI was constructed using indicators of a country’s achievements in four dimensions: creation of technology, diffusion of old innovations, diffusion of recent innovations and human skills.