SOUTH CAROLINA INVENTIONINDEX | JANUARY 2026

January 2026: 1.23% (B- grade)

South Carolina inventionINDEX January 2026: 1.23% (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 Carolina inventionINDEX Scores – Last 12 months

The January 2026 inventionINDEX for South Carolina stands at 1.23%, carrying a B- rating. This figure represents a marginal cooling from the 1.26% recorded in December 2025 and sits notably below the five-year peak of 1.93% achieved in September 2025. While the current score indicates a stable environment, it reflects a shift toward a more cautious pace of innovation compared to the robust activity observed throughout much of the previous year. This moderate positioning suggests that while the foundational elements of the index remain intact, the state is currently in a phase of consolidation rather than rapid expansion.

Looking back across the 60-month horizon, South Carolina’s innovation landscape reveals a pattern of significant volatility and resilience. The index has frequently surged into the A+ category, with standout performances in early 2021, late 2023, and mid-2025. However, these peaks are often followed by sharp corrections, such as the drop to 1.08% in October 2025 or the five-year low of 1.06% in July 2022. This cyclical nature indicates that the state’s innovation output is sensitive to broader economic shifts, yet it consistently demonstrates the capacity to rebound from lower-tier ratings back into the high-performing A range within relatively short timeframes.

A higher grade on the inventionINDEX, particularly those in the A and A+ categories, serves as a powerful indicator of economic health and forward-looking momentum. When the score climbs toward the 1.8% or 1.9% threshold, it typically reflects a surge in patent filings, increased research and development expenditure, and a flourishing startup ecosystem. These high-performing periods attract external investment and high-skill labor, fostering a virtuous cycle of growth that strengthens the state’s competitive position on a national scale. A strong rating validates current industrial strategies and provides the confidence necessary for businesses to commit to long-term, high-risk projects.

Conversely, a decline in the index toward the C rating suggests potential vulnerabilities that require careful monitoring. When the score falls near the 1.0% mark, it often signals a contraction in creative output or a lull in the commercialization of new technologies. Such dips can lead to reduced venture capital interest and a slower pace of job creation within the tech and manufacturing sectors. If lower scores persist, they may imply a loss of momentum that could allow regional competitors to gain an advantage. Therefore, these periods of lower performance serve as a critical signal for stakeholders to reassess investment priorities and ensure the state remains an attractive destination for future breakthroughs.

Discussion:

In January, the South Carolina inventionINDEX scored a positive 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 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 Carolina office provides R&D tax credit consulting and advisory services to Columbia, Charleston, North Charleston, Mount Pleasant, Rock Hill, Greenville, Summerville, Sumter, Hilton Head Island, and Spartanburg.

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.