March 2026: 1.78% (A+ grade
Tennessee inventionINDEX March 2026: 1.78% (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).
Tennessee inventionINDEX Scores – Last 12 months
| Month | inventionINDEX Score |
| March 2026 | 1.78% |
| Feb 26 | 1.51% |
| Jan 26 | 1.42% |
| Dec 25 | 1.71% |
| Nov 25 | 1.51% |
| Oct 25 | 1.54% |
| Sep 25 | 1.84% |
| Aug 25 | 1.40% |
| Jul 25 | 1.87% |
| Jun 25 | 1.44% |
| May 25 | 1.37% |
| Apr 25 | 1.51% |
| Mar 25 | 1.56% |
The March 2026 Tennessee inventionINDEX score of 1.78 percent marks a powerful conclusion to the first quarter, securing a top-tier A+ rating. This performance continues a steady climbing trend observed since the start of the year, having risen from 1.42 percent in January and 1.51 percent in February. The current figure represents one of the strongest showings for the state in recent years, signaling that the momentum within Tennessee’s innovation sector is not only being maintained but is actively accelerating as the year progresses.
When placed in the context of the last sixty months, the March 2026 score stands as a testament to the state’s growing intellectual capital. While it remains slightly below the five-year peak of 1.87 percent recorded in July 2025, it significantly outperforms the historical lows found in 2021, such as the 1.07 percent C+ rating in December of that year. The data reveals a clear evolution from the more volatile B-range ratings common in 2022 and 2023 to a much more consistent presence in the A and A+ categories throughout late 2025 and early 2026, indicating a maturing and stabilizing research environment.
Securing a high grade such as an A+ provides several strategic advantages for the Tennessee economy. A thriving inventionINDEX typically indicates an increase in patent applications, a surge in research and development investment, and a heightened level of confidence from venture capital firms. These scores suggest a robust synergy between the state’s research universities and its industrial sectors, creating a fertile environment for high-growth startups and technological breakthroughs. Such a reputation as a leading innovation hub helps attract national talent and high-paying jobs, reinforcing a cycle of prosperity and industrial modernization.
Conversely, a decline in the index toward the C or B-range carries significant risks for the state’s future. Lower scores, like the 1.18 percent seen in April 2023, often reflect a period of reduced creative output or structural bottlenecks that prevent new ideas from reaching the marketplace. Such dips can lead to investor hesitation and a potential brain drain, as specialized professionals may seek more active ecosystems in neighboring regions. Maintaining the current high-performance trajectory is therefore essential to prevent the economic stagnation and loss of competitive edge that often accompany a falling index.
Discussion:
In March, the Tennessee inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed 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 Tennessee office provides R&D tax credit consulting and advisory services to Nashville, Memphis, Knoxville, Chattanooga, Clarksville, Murfreesboro, Franklin, Jackson, Johnson City, and Bartlett.
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.
Are you eligible?
Why choose us?
Pass an Audit?
What is the R&D Tax Credit?
The Research & Experimentation Tax Credit (or R&D Tax Credit), is a general business tax credit under Internal Revenue Code section 41 for companies that incur research and development (R&D) costs in the United States. The credits are a tax incentive for performing qualified research in the United States, resulting in a credit to a tax return. For the first three years of R&D claims, 6% of the total qualified research expenses (QRE) form the gross credit. In the 4th year of claims and beyond, a base amount is calculated, and an adjusted expense line is multiplied times 14%. Click here to learn more.
Never miss a deadline again
Stay up to date on IRS processes
Discover R&D in your industry
R&D Tax Credit Preparation Services
Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed provides state and federal R&D tax credit preparation and audit services to all 50 states.
If you have any questions or need further assistance, please call or email our CEO, Damian Smyth on (800) 986-4725.
Feel free to book a quick teleconference with one of our national R&D tax credit specialists at a time that is convenient for you.
R&D Tax Credit Audit Advisory Services
creditARMOR is a sophisticated R&D tax credit insurance and AI-driven risk management platform. It mitigates audit exposure by covering defense expenses, including CPA, tax attorney, and specialist consultant fees—delivering robust, compliant support for R&D credit claims. Click here for more information about R&D tax credit management and implementation.
Our Fees
Swanson Reed offers R&D tax credit preparation and audit services at our hourly rates of between $195 – $395 per hour. We are also able offer fixed fees and success fees in special circumstances. Learn more at https://www.swansonreed.com/about-us/research-tax-credit-consulting/our-fees/
Choose your state
