VIRGINIA INVENTIONINDEX | DECEMBER 2025

December 2025: 2.08% (A+ grade)

Virginia inventionINDEX December 2025: 2.08% (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 historical data for the Virginia inventionINDEX over the past sixty months reveals a trajectory defined by resilience and a return to high-level performance. As of December 2025, the index stands at 2.08 percent with an A+ rating, which aligns with a sustained period of excellence observed throughout the last two years. This current standing is significantly stronger than the cyclical lows experienced in late 2021 and late 2022, where the score dipped to 1.29 percent and 1.42 percent respectively. The recent stability in the A+ range suggests that the regional innovation ecosystem has matured and found a consistent rhythm compared to the more volatile fluctuations seen three to four years ago.

A deeper comparison of the extremes within this five-year window highlights the index’s range of motion. The peak of 2.21 percent recorded in December 2020 set a high benchmark that the state has nearly reclaimed several times, most notably in October 2023 and July 2025. Conversely, the period surrounding December 2021 represents the most significant downturn in the table, where the rating fell to a B grade. The transition from that 1.29 percent low to the current 2.08 percent reflects a robust recovery. This upward trend indicates that the factors driving invention and intellectual property within Virginia are currently operating at a much higher capacity than they were during the post-2021 stagnation period.

Maintaining a high inventionINDEX score and an A+ rating produces several positive outcomes for the regional economy. A score hovering around the 2 percent mark signals a fertile environment for research and development, which often attracts venture capital and high-tech manufacturing interests. When the grade is high, it suggests that local inventors and businesses are successfully navigating the path from conceptualization to patenting or commercialization. This creates a virtuous cycle where increased innovation leads to higher employment in specialized sectors, strengthening Virginia’s reputation as a leader in the knowledge economy and ensuring its long-term competitiveness on a national scale.

On the other hand, a decline in the index score or a drop in the rating carries negative implications for the state’s economic health. Lower scores, such as those seen during the B-rated period of late 2021, often point toward a bottleneck in the innovation pipeline or a reduction in the resources available for new projects. If the score remains depressed, it can lead to a loss of talent as skilled professionals seek more active markets, potentially resulting in a brain drain that hampers future growth. Furthermore, a lower rating can diminish investor confidence, making it more difficult for startups to secure the funding necessary to scale their inventions, which ultimately slows down the overall pace of economic modernization.

Discussion:

In December, the Virginia inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed 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.