SOUTH DAKOTA INVENTIONINDEX | NOVEMBER 2025

November 2025: 1.03% (B grade)

South Dakota inventionINDEX November 2025: 1.03% (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).

South Dakota inventionINDEX Scores – Last 12 months

The South Dakota inventionINDEX reached a score of 1.03% in November 2025, which corresponds to a solid B rating. This performance indicates a significant recovery compared to the previous month, where the score dipped to 0.97% and triggered a D rating. When examining the broader historical context, the current score aligns closely with the state historical average of approximately 1.05%. This recent uptick suggests a return to a more stabilized innovation environment following a temporary contraction in October.

Analyzing the historical data over the past 60 months reveals a pattern of resilience and occasional peaks in South Dakota inventive capacity. The highest recorded score occurred in February 2021 with a value of 1.20%, while the lowest point was observed in February 2023 at 0.96%. Despite these fluctuations, the index has demonstrated consistent strength, maintaining a score of 1.00% or higher in more than 90% of the months tracked. This longevity of performance suggests that the local innovation ecosystem is robust and capable of weathering minor economic or industrial shifts.

Achieving higher grades, such as the A+ ratings seen frequently throughout 2022 and 2024, yields substantial positive outcomes for the regional economy. High scores typically reflect an increase in intellectual property filings, enhanced collaborative efforts between universities and private sectors, and heightened interest from venture capitalists. When the index surpasses the 1.10% threshold, it often signals a peak in industrial efficiency and creative output. These periods of excellence foster a competitive atmosphere that attracts top-tier talent and secures South Dakota position as a hub for technological advancement.

Conversely, a decline in the inventionINDEX score toward the D range presents several negative implications for the state. Lower scores, like the 0.97% seen in October 2025 or the 0.96% in February 2023, often correlate with periods of stagnation in research and development or a reduction in available innovation grants. Such dips can lead to a decrease in investor confidence and a potential brain drain if local inventors seek more supportive environments elsewhere. Maintaining a score above the 1.00% baseline is therefore critical to ensuring long-term sustainability and preventing the erosion of South Dakota competitive edge in the national marketplace.

Discussion:

In November, the South Dakota inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is in contrast to the prior 12 months, which experienced an 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 South Dakota office provides R&D tax credit consulting and advisory services to Sioux Falls, Rapid City, Aberdeen, Brookings, and Watertown.

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.