ALABAMA inventionINDEX | MARCH 2025

March 2025: 1.20% (B- grade)

Alabama Invention Index March 2025: 1.20% (B- grade)

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).

Discussion:

In March, the Alabama Invention Index 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 world continues to recover from the height of the Covid-19 pandemic, it is unclear if there is any backlog of applications awaiting approval or if the department has fully caught up. If approvals are not yet caught up, we may see a decrease in approvals – and a reduced Invention Index – in the coming months/years as the state feels the full economic impact of companies closing and/or being forced to minimize their staffing and therefore minimize their R&D work hours.

In March 2025, Alabama’s Invention Index was 1.20%, earning a B- grade. This represents a decline from February 2025’s 1.53% (A+ grade) and suggests a decrease in innovation output compared to the previous month. ​

The positive outcomes of a higher Invention Index score, such as February’s 1.53%, include enhanced economic growth, increased attractiveness for investment, and a stronger reputation for innovation. Higher scores indicate that the state is effectively translating economic growth into patent production, fostering a robust environment for research and development.​

Conversely, a lower score, like March’s 1.20%, may signal potential challenges in maintaining innovation momentum. It could reflect a slowdown in patent filings or economic factors that hinder research and development activities. Such declines might deter potential investors and suggest the need for policy interventions to stimulate innovation.​

Overall, while March 2025’s B- grade indicates a respectable level of innovation, the drop from February’s A+ highlights the importance of sustaining and enhancing efforts to promote research and development within the state.

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.

Learn more about the inventionINDEX here.

Swanson Reed’s office in Alabama provides R&D tax credit consulting and advisory services to Birmingham, Montgomery, Mobile, Huntsville, Tuscaloosa, Hoover, Dothan, Auburn, Decatur and Madison.

Feel free to book a quick teleconference with one of R&D tax specialists at a time that is convient for you, if you would like to learn more about R&D tax credit opportunities.

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