HAWAII INVENTIONINDEX | SEPTEMBER 2025

September 2025: 1.85% (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).

Hawaii inventionINDEX Scores – Last 12 months

The Hawaii inventionINDEX for September 2025 stands at 1.85%, earning an A+ grade. This score is consistent with the previous September 2024 and September 2023 readings, both also at 1.85% and an A+ grade, indicating a pattern of strong performance in this specific month over recent years. When comparing this to the overall average of the last 60 months, which hovers around 1.25%, the current score suggests a robust innovation output for Hawaii. Higher grades, particularly in the A range, signify a positive economic sentiment, suggesting that the state’s GDP growth is effectively outpacing patent production growth, a healthy indicator for economic recovery and sustained development.

A deeper look at the historical data reveals fluctuations, with scores ranging from a low of 0.50% (F grade) in June 2024 to a high of 3.03% (A+ grade) in July 2024. The September 2025 score of 1.85% is notably higher than the average score for the last 12 months, which is approximately 1.29%. This upward trend in recent performance is a positive sign, indicating a potential strengthening of the state’s innovation ecosystem. Sustained periods of higher inventionINDEX scores and corresponding A or B grades often correlate with increased investment in research and development, a thriving entrepreneurial environment, and a more resilient economy capable of navigating various economic challenges.

Conversely, lower inventionINDEX scores, particularly those falling into the D or F grade categories, signal potential economic headwinds. For instance, the 0.50% (F grade) in June 2024 and the 0.67% (D-) scores observed in February 2025, November 2023, July 2023, and December 2021, indicate periods where patent production growth may not be keeping pace with GDP growth, or perhaps even declining relative to it. Such lower grades can imply a deceleration in innovation, which could lead to a less competitive economic landscape, reduced opportunities for growth, and a slower recovery from economic incidents. These periods warrant closer examination to understand underlying factors impacting innovation.

The consistent A+ grade for September 2025, when viewed against the backdrop of the past five years, suggests a recurring strength in Hawaii’s innovation output during this particular month. While individual monthly fluctuations are natural, the overall pattern of the inventionINDEX provides valuable insights into the state’s economic vitality and its capacity for innovation. Monitoring these trends allows for a nuanced understanding of economic shifts and helps in identifying periods of growth and areas that may require strategic attention to foster a more innovative and resilient economy.

Discussion:

In September, the Hawaii inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the upward trend for the year. This is similar to the prior 12 months, which experienced a considerable upward 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 Hawaii office provides R&D tax credit consulting and advisory services to Honolulu, East Honolulu, Pearl City, Hilo and Kailua.

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.