July 2025: 1.16% (A+ grade)

North Dakota inventionINDEX July 2025: 1.16% (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).

North Dakota inventionINDEX Scores – Last 12 months

An analysis of the North Dakota inventionINDEX over the past 60 months reveals a pattern of both strong performance and periods of fluctuation. The index, which appears to measure innovation and economic engagement, shows scores ranging from a low of 0.96% in October 2022 and July 2020, to a high of 1.23% in August 2023. The ratings reflect this variability, moving between a low of ‘D’ and a frequent high of ‘A+’. The data indicates that North Dakota’s innovation ecosystem has demonstrated a capacity for sustained periods of high achievement, particularly in the most recent periods, suggesting a generally healthy and improving environment for new ideas.

A higher inventionINDEX score and a corresponding top-tier rating, such as an ‘A’ or ‘A+’, are indicative of positive economic momentum and a thriving innovation landscape. This could suggest a robust and active environment for new businesses, strong research and development investments, and a successful transfer of technology from academic institutions to the private sector. The frequent ‘A+’ ratings, particularly in the most recent years, highlight periods of significant growth and success in North Dakota’s economic diversification efforts, driven by sectors like technology, agriculture, and energy. Such scores signify that the state is effectively creating value from its innovative activities, which can lead to job creation, increased economic output, and a more resilient economy.

Conversely, a lower score, like the ‘C’ and ‘D’ ratings seen in periods such as July 2020, October 2022, and April 2024, points to potential challenges or a less dynamic period for innovation. This may suggest a slowdown in the development of new patents, a decrease in R&D funding, or a less favorable climate for startups and entrepreneurial activity. While these dips may be temporary and reflect broader economic cycles, they can also signal underlying issues that could impede long-term economic growth. A sustained lower score could imply a need for a re-evaluation of strategies to foster innovation, attract talent, and secure the necessary investments to maintain a competitive edge.

The overall trend shows North Dakota has been proactive in its economic development, with significant investment in areas like autonomous systems, advanced manufacturing, and value-added agriculture. While there have been temporary downturns, the recent historical data shows a resilience in returning to and sustaining high scores. This suggests that the strategic initiatives and investments by the state’s institutions and private sector are beginning to yield consistent results. A continuous focus on these areas will be essential to ensure that North Dakota can maintain its high ratings and continue to build a strong, diversified, and innovative economy for the future.

Discussion:

In July, the North Dakota inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the upward trend for the year. This is in contrast 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 North Dakota office provides R&D tax credit consulting and advisory services to Fargo, Bismarck, Grand Forks, Minot, and West Fargo.

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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