COLORADO INVENTIONINDEX | AUGUST 2025

August 2025: 1.68% (A grade)

Colorado inventionINDEX August 2025: 1.68% (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).

Colorado inventionINDEX Scores – Last 12 months

Based on the historical data, the Colorado inventionINDEX has fluctuated consistently over the past 60 months, reflecting the dynamic nature of innovation. The scores have ranged from a low of 1.21% in December 2021 to a high of 2.44% in October 2023. The ratings have similarly varied, from a low of B- to a high of A+. The most recent score of 1.68% in August 2025, which corresponds to an A rating, is positioned within the middle of this historical range, indicating a solid, but not exceptional, performance relative to the past five years. This suggests that while Colorado’s innovative momentum remains strong, it has moderated slightly from some of the peak periods seen in 2023 and 2024.

A consistently high inventionINDEX score, such as those earning an A+ rating, is a significant indicator of a thriving and innovative economy. This elevated performance suggests a robust environment for new ideas, with increased investment in research and development and a strong pipeline of emerging businesses and technologies. Such a positive trend can attract further venture capital, talented professionals, and large-scale corporate investments, creating a self-reinforcing cycle of economic growth and job creation. A high score signifies that the policies and infrastructure supporting innovation are effective and are yielding tangible results that benefit the entire region.

Conversely, a lower inventionINDEX score, such as those that result in a B or B- rating, can signal potential challenges or a slowdown in innovative activity. This could be a result of various factors, including a decrease in research funding, economic downturns, or a less supportive regulatory environment for startups. These lower scores might indicate that the region is less competitive in attracting cutting-edge industries and could be at risk of losing its innovative edge. Addressing a downturn in the score requires careful analysis of the underlying causes and a proactive strategy to reinvigorate the ecosystem, which may include targeted incentives, educational programs, and public-private partnerships.

In summary, the inventionINDEX serves as a vital professional barometer for Colorado’s capacity for innovation. While the historical data shows regular fluctuations, the overall trend is one of resilience and consistent performance. The most recent A rating for August 2025 shows the state is maintaining its position as a key hub for new ideas, though it is not operating at its historical peak. Monitoring these scores is crucial for policymakers and business leaders to understand the health of the innovation landscape and to make informed decisions that will ensure Colorado remains at the forefront of technological and economic advancement.

Discussion:

In August, the Colorado inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed 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 Colorado office provides R&D tax credit consulting and advisory services to Denver, Colorado Springs, Aurora, Fort Collins, Lakewood, Thornton, Arvada, Westminster, Pueblo and Centennial.

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.