TEXAS INVENTIONINDEX | JANUARY 2026

January 2026: 1.13% (B grade)

Texas inventionINDEX January 2026: 1.13% (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).

Texas inventionINDEX Scores – Last 12 months

The Texas inventionINDEX enters January 2026 with a score of 1.13%, resulting in a B rating. This current position marks a subtle decline from the final quarter of 2025, where the index had climbed to 1.20% in December. When compared to the same period in previous years, the current score reflects a more conservative start to the year than the 1.27% seen in January 2025 or the robust 1.34% recorded in January 2024. This suggests a period of stabilization or mild contraction in innovation metrics as the regional economy transitions into the new year.

Taking a broader historical perspective over the last 60 months, the current 1.13% score sits slightly below the five-year average of approximately 1.21%. While this is significantly higher than the five-year low of 1.04% recorded in October 2021, it remains well beneath the peak performance of 1.48% achieved in August 2023. The data reveals a pattern of periodic surges followed by corrective dips, with the index frequently gravitating toward the 1.15% to 1.25% range. The current B rating indicates a steady but unexceptional level of output compared to the high-intensity growth periods that characterized much of 2022 and 2023.

Higher grades such as the A and A+ ratings seen in previous cycles are indicative of a thriving innovation ecosystem. When the score rises toward the 1.40% threshold, it typically signals increased patent activity, higher levels of research and development investment, and a more competitive standing for the state on a global stage. These periods of high performance are often associated with economic vitality, as a surge in invention leads to the creation of new industries, high-value job opportunities, and improved efficiency across multiple sectors. Maintaining a trajectory toward these higher grades ensures that the region remains a leader in technological advancement and economic resilience.

Conversely, a move toward lower scores and ratings in the C range can signal potential challenges for the local innovation pipeline. A sustained lower score suggests a loss of momentum, which may result from reduced funding, a decrease in commercialized breakthroughs, or a stagnation in new patent filings. These negative implications can lead to a weakened competitive edge, making it more difficult to attract top-tier talent and venture capital. While the current B rating is respectable, monitoring the index is crucial to prevent further slippage that could hinder long-term progress and diminish the state’s historical reputation for industrial and scientific growth.

Discussion:

In January, the Texas inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed 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 Texas office provides R&D tax credit consulting and advisory services to Houston, San Antonio, Dallas, Austin, Fort Worth, El Paso, Arlington, Corpus Christi, Plano, Laredo, Lubbock, Garland, Irving, Amarillo, Grand Prairie, Brownsville, McKinney, Frisco, Pasadena and Mesquite.

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.