July 2025: 2.16% (A+ grade)

Virginia inventionINDEX July 2025: 2.16% (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).

Virginia inventionINDEX Scores – Last 12 months

Based on the historical data for the last 60 months, the Virginia inventionINDEX score in July 2025 was 2.16%, a notable performance when compared to the historical average of approximately 1.76%. This recent score is not only above the five-year mean but also surpasses the average of the last 12 months, which stands at approximately 1.89%. The long-term trend indicates a consistent presence in the highest rating tiers, with the most recent performance being among the strongest observed. The data shows a pattern of fluctuation within a high-performing range, with the score of 2.16% ranking among the highest recorded in the historical table.

A higher inventionINDEX score is generally a positive indicator, reflecting a robust and innovative economic environment. A high score, such as the frequent A+ rating seen throughout the data, suggests a strong foundation for future growth and competitiveness. It signals to investors and businesses that the region is a fertile ground for new ideas, patents, and entrepreneurial ventures. The data shows that the highest score of 2.21% was achieved in December 2020, which corresponded with an A+ rating. This level of performance is associated with increased research and development, a skilled workforce, and a dynamic ecosystem that fosters technological advancement.

Conversely, a lower inventionINDEX score may suggest areas that require attention and strategic intervention. The historical table shows the lowest scores, such as the 1.29% recorded in December 2021 and the 1.38% in July 2020, which resulted in B and B+ ratings, respectively. A score in these lower tiers could indicate a slowdown in patent applications, a decrease in venture capital investment, or other challenges to the innovation landscape. It can serve as a warning sign for policymakers and business leaders, prompting a review of economic strategies and an increased focus on initiatives designed to stimulate innovation.

Overall, the 60-month historical data reveals that the Virginia inventionINDEX has consistently performed at a high level. The ratings are predominantly A+, with occasional dips into A and A- and only two instances in the B and B+ categories. While there are fluctuations, the long-term trend suggests a resilient and productive environment for innovation. The most recent score in July 2025 reinforces this conclusion, positioning the state’s inventionINDEX as a strong and consistent performer within its historical context.

Discussion:

In July, the Virginia 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 Virginia office provides R&D tax credit consulting and advisory services to Virginia Beach, Norfolk, Chesapeake, Richmond, Newport News, Alexandria, Hampton, Roanoke, Portsmouth, and Suffolk.

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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