KENTUCKY INVENTIONINDEX | JUNE 2025

June 2025: 0.95% (D+ grade)

Kentucky inventionINDEX June 2025: 0.95% (D+ grade)

The inventionINDEX measures innovation output by comparing GDP growth with patent production growth. 

Anything over C grade is positive sentiment; anything under C is negative outlook/sentiment. Using that sentiment, it is possible to observe trends over time, and also compare states/countries. In doing so, we can predict which states have the best chance to recover economically from the pandemic (or any other economic incident that may occur).

The Kentucky inventionINDEX score for June 2025 stands at 0.95%, reflecting a modest increase from May’s 0.88%. This rebound comes after a period of fluctuating values, suggesting a slight stabilization in local innovation activity. While still under the yearly high of 1.06% recorded in July 2024, the current score returns Kentucky to a level comparable to September 2024, reinforcing a slow but steady recovery in inventive momentum. This upturn is encouraging given that May 2025 had one of the lowest scores of the last 12 months.

Looking at the broader historical context, Kentucky’s inventionINDEX has remained mostly under 1.00% for much of the past year, except for a few peaks-January, December, and July notably surpassing the 1.00% mark. The overall trend indicates moderate innovation activity with occasional surges, possibly tied to seasonal R&D cycles or sector-specific developments. The current June 2025 value is below the June 2024 mark, which held at exactly 1.00%, showing that while activity has improved month-over-month, it has slightly declined year-over-year.

A higher inventionINDEX score typically signals increased research output, stronger patent activity, and a more dynamic innovation environment. This can attract venture capital, support workforce development, and position Kentucky as a competitive hub for technology and manufacturing. If sustained, scores above 1.00% can also reflect the effectiveness of public and private sector collaboration in fostering innovation ecosystems.

Conversely, lower scores can suggest reduced patent filings or a slowdown in new product development, which may point to economic uncertainty, funding challenges, or lagging support infrastructure for inventors and startups. The sub-1.00% trend through much of 2025 highlights the need for strategic investment and policy adjustments to reinforce Kentucky’s innovation pipeline. Maintaining or surpassing the current score in future months will be essential for long-term regional competitiveness.

Discussion:

In June, the Kentucky inventionINDEX scored a negative sentiment which was lower than the previous year’s average but outperformed the downward trend for the year. This is similar to the prior 12 months, which experienced a slight downward trend. 

As the economy continues to stabilize in the post-pandemic era, it remains uncertain whether any backlog of applications still exists or if the department has returned to normal processing timelines. The inventionINDEX could also be affected by lingering consequences from the pandemic, such as company closures, reduced workforces, and limited R&D capabilities, which may still be impacting current operations.

Learn More:

Are you thinking of patenting any of your bright ideas? Did you know your research work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? To find out more, please check out our free online eligibility test.

Swanson Reed’s Kentucky office provides R&D tax credit consulting and advisory services to Louisville, Lexington, Bowling Green, Owensboro, Covington, Richmond, Georgetown, Florence, Hopkinsville, and Elizabethtown.

Feel free to book a quick teleconference with one of R&D tax specialists if you would like to learn more about R&D tax credit opportunities.

Who We Are:

Swanson Reed is the largest Specialist R&D tax credit advisory firm in the United States. With offices nationwide, we are one of the only firms globally to exclusively provide R&D tax credit consulting services to our clients. We have been exclusively providing R&D tax credit claim preparation and audit compliance solutions for over 30 years. 

Swanson Reed hosts daily free webinars and provides free IRS CE and CPE credits for CPAs.  For more information please visit us at www.swansonreed.com/free-webinars or contact your usual Swanson Reed representative.