VIRGINIA INVENTIONINDEX | AUGUST 2025

August 2025: 1.99% (A+ grade)

Virginia inventionINDEX August 2025: 1.99% (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

The Virginia inventionINDEX for August 2025 stands at 1.99%, earning an A+ rating. This current score indicates a robust state of innovation output when compared to many of the preceding months in the 60-month historical data. While it is slightly lower than the July 2025 score of 2.16%, it represents a strong performance that generally aligns with the positive sentiment observed over recent years. The consistency of A and A+ grades across most of this period suggests a sustained environment conducive to innovation and economic growth in Virginia.

A higher inventionINDEX score and a corresponding strong grade, such as the consistent A+ ratings seen for Virginia, signify several positive outcomes for the state. This indicates a healthy relationship between GDP growth and patent production, which are key indicators of innovation and economic dynamism. Such performance can attract investment, foster job creation, and lead to increased prosperity. It also suggests that Virginia is effectively cultivating an environment where new ideas are generated, developed, and brought to fruition, contributing to its long-term economic resilience and competitiveness.

A lower inventionINDEX score or a declining grade carries significant negative implications. A decrease in the score suggests a potential slowdown in innovation output relative to economic growth, or even a decline in absolute terms. This could be due to various factors, including reduced investment in research and development, a less favorable business climate, or challenges in translating new ideas into patentable inventions. Such a trend could lead to a stagnation of economic growth, reduced competitiveness, and a less attractive environment for businesses and talent.

Examining the historical data, while Virginia has maintained a generally strong performance, periods with grades like B or A- (e.g., December 2021, February 2022, September 2022, December 2022, October 2020) highlight months where the innovation output was comparatively less robust. These lower grades, though not necessarily indicative of a severe downturn, serve as signals for potential areas requiring attention. Sustained periods of lower scores could suggest underlying issues affecting the state’s innovation ecosystem, necessitating strategic interventions to re-energize patent production and align it more closely with economic expansion.

Discussion:

In August, the Virginia inventionINDEX scored a positive sentiment which was higher than the previous year’s average but 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 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.