ARKANSAS INVENTIONINDEX | AUGUST 2025

August 2025: 1.08% (C+ grade)

Arkansas inventionINDEX August 2025: 1.08% (C+ 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).

Arkansas inventionINDEX Scores – Last 12 months

Based on the historical data for the last 60 months, the Arkansas inventionINDEX provides a clear view of the state’s recent innovative health. The most recent score for August 2025 is 1.08, which corresponds to a C+ rating. This score is a slight decrease from the previous month’s A- rating and falls below the 60-month average of 1.18. While a C+ rating indicates a score that is not critically low, it suggests that the state’s innovation output has room for improvement when compared to its historical performance. This recent data point highlights a minor shift and prompts a deeper examination of the factors influencing these trends.

The positive implications of a higher inventionINDEX score are numerous and directly tied to economic prosperity. As seen in October 2023, when the score reached a high of 1.94 and earned an A+ rating, a strong inventionINDEX indicates a robust environment for creativity and new ideas. This is often a sign of increased patent filings, new business startups, and strong research and development activity. A high score can also signal a more attractive climate for venture capital and external investment, as it shows a dynamic and fertile ground for new technologies and innovative products. Such periods of high performance can lead to job growth and an overall increase in the state’s economic competitiveness.

Conversely, a lower inventionINDEX score can have significant negative implications. The lowest score in the 60-month period occurred in October 2022, when the index dipped to 0.76 and received a D- rating. Such a score may point to a decline in key innovation metrics, a slowdown in the development of new inventions, or challenges in bringing new products to market. A sustained low score could make it more difficult for the state to attract and retain top talent, as well as secure the funding necessary for innovation-driven projects. This could lead to a less vibrant economy and a potential decrease in the state’s long-term growth prospects.

Looking at the overall trend over the last five years, the inventionINDEX has shown a pattern of notable peaks and troughs. The scores generally fluctuate but have not maintained a consistent upward trajectory since the peak in late 2023. The average score for the most recent 12 months is 1.14, slightly below the overall 60-month average. The index serves as a valuable barometer, reflecting the cyclical nature of innovation and the ongoing need for policies and investments that foster a supportive ecosystem. By carefully monitoring these fluctuations, stakeholders can better understand the health of the state’s innovation economy and make informed decisions to address weaknesses and capitalize on strengths.

Discussion:

In August, the Arkansas inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the downward trend for the year. This is similar to the prior 12 months, which experienced a 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 Arkansas office provides R&D tax credit consulting and advisory services to Little Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff and Bentonville.

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.