WASHINGTON INVENTIONINDEX | AUGUST 2025

August 2025: 1.22% (C+ grade)

Washington inventionINDEX August 2025: 1.22% (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).

Washington inventionINDEX Scores – Last 12 months

The Washington inventionINDEX for August 2025 stands at 1.22%, earning a C+ grade. This places it lower than the preceding month, July 2025, which saw a score of 1.59% and a B+ rating. Compared to August 2024’s score of 1.25% (B- grade) and August 2023’s significantly higher 1.76% (A grade), the current reading suggests a notable decline in innovation output over the past two years for the same month. Examining the 12-month trend preceding August 2025, the scores have largely remained within the C and B ranges, with a few instances of A grades observed further back in the 60-month history.

A higher inventionINDEX score and a corresponding superior grade, such as an A or B, are indicative of robust innovation output, which is measured by comparing GDP growth with patent production growth. Positive sentiment, as denoted by grades C and above, suggests a healthy and dynamic economic environment. Such conditions often correlate with increased research and development activities, business expansion, job creation, and overall economic resilience. States consistently achieving higher scores are better positioned for economic recovery and growth, particularly during periods of economic uncertainty or following downturns.

A lower inventionINDEX score and a grade below C signify a negative outlook or sentiment regarding innovation. A declining trend in the index can suggest a slowdown in patenting activity or a lagging GDP growth relative to innovation efforts. This could imply a less vibrant economic climate, potentially leading to reduced investment in research and development, slower job growth, and a diminished capacity for economic recovery. Prolonged periods of lower scores could signal underlying challenges within the state’s innovation ecosystem or broader economic health.

Analyzing the 60-month historical data reveals fluctuations in Washington’s innovation performance. While periods of strong A and B grades are evident, particularly in late 2022 and early 2023, the more recent trend, culminating in the August 2025 C+ grade, suggests a moderating pace of innovation. Understanding these shifts is crucial for policymakers and businesses as the inventionINDEX provides insights into the state’s capacity for future economic expansion and its ability to navigate evolving economic landscapes. Monitoring these trends allows for timely interventions and strategic planning to foster a more favorable environment for innovation.

Discussion:

In August, the Washington inventionINDEX scored a positive sentiment which was lower than the previous year’s average but outperformed the downward trend for the year. This is similar 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 Washington office provides R&D tax credit consulting and advisory services to Seattle, Spokane, Tacoma, Vancouver, Bellevue, Kent, Everett, Renton, Federal Way, and Yakima.

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.