ILLINOIS INVENTIONINDEX | JANUARY 2026

January 2026: 0.99% (C- grade)

Illinois inventionINDEX January 2026: 0.99% (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).

Illinois inventionINDEX Scores – Last 12 months

The January 2026 Illinois inventionINDEX score of 0.99 percent represents a marginal contraction from the final months of 2025, where the index held steady at 1.14 percent. This transition from a C+ rating to a C- rating indicates a cooling period in innovation activity as the new year begins. When examining the final quarter of 2025, the index showed notable fluctuation, dipping to 0.98 percent in October before a brief recovery. This recent performance suggests a period of caution or a plateau in the regional innovation pipeline compared to the more robust figures observed earlier in the five-year cycle.

Over the broader sixty-month horizon, the current score sits well below the historical peak of 3.00 percent achieved in October 2023. The index has demonstrated substantial volatility throughout this period, characterized by high-performing windows in 2021 and 2022 where scores frequently exceeded 2.00 percent and secured A+ ratings. However, the January 2026 score remains an improvement over the historical nadir of 0.43 percent recorded in July 2023. This long-term perspective reveals that while the current metrics are not at their lowest point, there is a clear downward trajectory from the heights of previous years that warrants close monitoring.

High grades in the inventionINDEX, such as the A and A+ ratings seen throughout 2024 and 2023, typically correlate with a surge in patent filings, increased venture capital investment, and a more aggressive entrepreneurial spirit. These elevated scores signal to the global market that the Illinois innovation ecosystem is operating at peak efficiency, attracting top-tier talent and fostering a climate where new ideas are rapidly commercialized. A high index score serves as a leading indicator of future economic prosperity, reflecting a robust pipeline of intellectual property that will eventually translate into regional job creation and technological advancement.

Conversely, the negative implications of lower scores, like the current 0.99 percent rating, point toward potential headwinds in the research and development sector. A lower grade often reflects a reduction in new patent applications or a slowing of the collaborative efforts required to drive industrial progress. If this downward trend persists, it could lead to a loss of competitive advantage relative to other innovation hubs, potentially discouraging long-term institutional investment. Addressing these dips requires a strategic focus on supporting local startups and incentivizing research institutions to ensure that the index returns to the higher tiers of performance observed in the recent past.

Discussion:

In January, the Illinois inventionINDEX scored a negative sentiment which was lower than the previous year’s average and underperformed the downward trend for the year. This is in contrast to the prior 12 months, which experienced a slight 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 Illinois office provides R&D tax credit consulting and advisory services to Chicago, Aurora, Rockford, Joliet, Naperville, Springfield, Peoria, Elgin, Waukegan, Champaign, Bloomington, Decatur, Evanston, Des Plaines, Berwyn, Wheaton, Carbondale, Mount Prospect, Oak Lawn and Skokie.

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.