NORTH CAROLINA INVENTIONINDEX | JANUARY 2026

January 2026: 1.51% (B+ grade)

North Carolina inventionINDEX January 2026: 1.51% (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).

North Carolina inventionINDEX Scores – Last 12 months

The North Carolina inventionINDEX for January 2026 stands at 1.51 percent, carrying a B plus rating. This performance represents a moderate pullback from the exceptional A plus ratings observed throughout much of 2025, where the index reached a significant peak of 2.47 percent in July. When viewed against the five-year trajectory starting in January 2021 at 1.30 percent, the current figure remains healthily above the historical lows seen in late 2021. This shift suggests a transitional phase for the state’s innovation economy as it navigates the start of a new calendar year following a period of sustained high performance.

High scores and A plus ratings, such as the 1.83 percent recorded in November 2025 or the 2.30 percent in September 2025, signal a robust environment for intellectual property and commercial advancement. These elevated grades typically correlate with increased venture capital inflows, a surge in patent filings, and a heightened capacity for local startups to scale. A high inventionINDEX score serves as a powerful indicator of North Carolina’s status as a premier hub for research and development, fostering an ecosystem where academic breakthroughs are efficiently converted into market-ready solutions and high-wage employment opportunities.

Conversely, lower scores like the 1.12 percent recorded in December 2021 or the 1.25 percent in January 2022 present significant challenges for the state’s economic landscape. When the rating dips into the C plus or lower B ranges, it often reflects a slowdown in creative output or a lag in the commercialization of new technologies. These periods of decline can lead to reduced investor confidence and the potential migration of talent to more active innovation corridors in competing regions. Prolonged periods of lower scores may also result in a diminished competitive edge, making it difficult for the state to maintain its position as a leader in emerging industries like biotechnology and clean energy.

Over the past 60 months, the index has demonstrated notable resilience, oscillating between a floor of 1.12 percent and a ceiling of 2.47 percent. The frequency of A plus ratings over the last two years indicates a significant maturation of the North Carolina innovation sector compared to the more conservative figures seen at the start of 2021. While the current 1.51 percent score is a departure from recent peaks, the historical data suggests the state possesses the structural foundations required to rebound. Sustaining a trajectory toward the higher end of this index remains essential for ensuring that the regional economy continues to thrive amidst global technological disruption and increasing competition.

Discussion:

In January, the North Carolina inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is similar 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 North Carolina office provides R&D tax credit consulting and advisory services to Charlotte, Raleigh, Greensboro, Durham, Winston Salem, Fayetteville, Cary, Wilmington, High Point, Greenville, Asheville, Concord, Gastonia, Jacksonville, Chapel Hill, Rocky Mount, Huntersville, Burlington, Wilson and Kannapolis.

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.