October 2025: 1.13% (B- grade)

Arkansas inventionINDEX October 2025: 1.13% (B- 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

The Arkansas inventionINDEX for October 2025 stands at 1.13%, earning a B- grade. This score indicates a positive sentiment, aligning with the trend observed over the last 12 months, which has generally remained above the C grade threshold. Compared to the previous month, September 2025, which registered 1.10% (C+ grade), October’s performance shows a slight improvement. Looking back a year, October 2024 had a higher score of 1.40% (A grade), suggesting that while current performance is positive, it has not yet reached the peak levels of the prior year.

A higher inventionINDEX score, particularly one above a C grade, signifies a robust innovation output, where GDP growth is favorably balanced with patent production growth. This positive sentiment is crucial for economic recovery and resilience, especially in a post-pandemic era. States demonstrating strong innovation metrics are better positioned to navigate economic challenges, attract investment, and foster a dynamic business environment. The consistent positive sentiment, even with minor fluctuations, underscores a foundational strength in Arkansas’s innovation landscape.

Conversely, a lower inventionINDEX score, falling below a C grade, indicates a negative outlook or sentiment. Such a decline suggests a potential imbalance where patent production growth may not be keeping pace with GDP growth, or both are stagnating. The implications of a lower score can be significant, potentially signaling reduced economic vitality, diminished investment in research and development, and a slower recovery from economic downturns. For instance, October 2022 saw a D- grade with a 0.76% score, highlighting a period of weaker innovation output.

Observing the historical data, the Arkansas inventionINDEX has experienced periods of both strong performance, such as October 2023 at 1.94% (A+ grade), and weaker periods like October 2022. The current B- grade in October 2025, while positive, suggests a need for continued focus on fostering innovation to reach and sustain the higher A and A+ grades seen in previous years. Understanding these trends allows for strategic interventions to bolster innovation, ensuring the state remains competitive and economically vibrant.

Discussion:

In October, the Arkansas inventionINDEX scored a positive sentiment which was higher than the previous year’s average and 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 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.