HAWAII INVENTIONINDEX | JULY 2025

July 2025: 1.51% (A- grade)

Hawaii inventionINDEX July 2025: 1.51% (A- 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).

Hawaii inventionINDEX Scores – Last 12 months

The inventionINDEX for July 2025 stands at 1.51% with an A- rating, representing a notable improvement from the previous month’s score of 1.17%. This upward movement positions the current score above the 60-month historical average of 1.33%, indicating a period of robust performance. However, a review of the historical data reveals significant volatility within the index. Scores have ranged from a high of 3.03% in July 2024, which received an A+ rating, to a low of 0.50% in June 2024, which was graded as F. These fluctuations highlight the dynamic nature of the innovation landscape being measured.

A high inventionINDEX score and a corresponding top-tier grade, such as A+, signify a period of exceptional innovative activity. Such outcomes often reflect a thriving ecosystem where research and development efforts are yielding substantial results. The positive implications of these higher scores are far-reaching. They can attract significant capital investment, foster the creation of new technologies and businesses, and enhance the region’s overall economic competitiveness. A strong inventionINDEX score serves as a powerful indicator of future growth potential and a fertile environment for talent and enterprise.

Conversely, a lower score, like the 0.50% recorded in June 2024, suggests a decline in the pace of innovation. A poor grade implies a potential slowdown in new inventions or a stagnation in the key drivers of technological advancement. The negative implications of a lower inventionINDEX are serious and can affect long-term growth. It may signal a less attractive environment for investors and innovators, potentially leading to a loss of competitive edge and difficulty in retaining skilled professionals. Addressing the underlying factors of a lower score is crucial for re-establishing momentum.

In summary, the inventionINDEX has shown a pattern of both significant peaks and troughs over the last five years. The latest score of 1.51% is a positive signal, indicating a strong performance relative to the historical average. However, the pronounced volatility observed in the data suggests that sustaining this momentum is key. Future performance will likely be contingent on continued investment in the innovation sector and the implementation of strategies that can foster consistent growth and mitigate the risk of future downturns.

Discussion:

In July, the Hawaii inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is similar to the prior 12 months, which experienced a considerable 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 Hawaii office provides R&D tax credit consulting and advisory services to Honolulu, East Honolulu, Pearl City, Hilo and Kailua.

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.

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