this ranking is looking at AVERAGE and CURRENT* level of development where development is based mostly on tech amount.
ranking low on this index does not mean your AA lacks an upper tier. it would mean your alliance is not only or mostly upper tier. it also would not mean your AA does not develop its nations. it would mean your AA has not yet developed its nations -- on average -- to the level of the AAs ahead of yours. this essentially does not reflect the rate at which an AA is currently developing (see below).
*CURRENT meaning it is static. some AAs ranking low here may be developing their younger, newer, or war-ravaged nations very efficiently -- in some cases, no doubt, more efficiently than some AAs ranking much higher. this index simply shows that they have not yet imported as much tech on average. to rank the development of AAs (again, defined here as tech acquired) over a period of time, one could take this same formula in a week or month or year and see the extent to which AAs' development has either progressed or regressed (ofc tracking actual development of an AA's nations requires taking an AA's nation gains and losses into consideration over the time period).
the formula is a bit arbitrary, but it is interesting nonetheless. it must be somewhat accurate because it places DBDC at the top. anyway, there's no reason to feel offended by nor get one's panties in a wad about this index. people should post more indexes. if you feel your AA is slighted, see how you can display information differently.