ARIZONA INVENTIONINDEX | APRIL 2025

April 2025: 2.57% (B+ grade)

Arizona inventionINDEX April 2025: 2.57% (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).

Arizona inventionINDEX – 6-Month Trend Analysis

Over the past six months, Arizona’s inventionINDEX Score has shown both progress and fluctuation, rising from a low of 2.21% in November 2024 to a peak of 2.98% in February 2025, before tapering to 2.57% in April 2025. This suggests an overall positive trend, with innovation activity strengthening through early 2025.

Higher scores—such as those in January and February—signal increased inventive output, likely from greater research activity, patent filings, or startup growth. These gains can lead to stronger economic performance, job creation in high-tech sectors, and enhanced competitiveness for the state as a destination for innovation investment.

However, the post-February decline and the low point in November highlight the importance of sustaining innovation efforts. If not addressed, declining scores could indicate reduced funding, talent retention issues, or waning collaboration between research institutions and industry.

In summary, while Arizona’s inventionINDEX has improved compared to late 2024, the recent dip underscores the need for continued support for R&D, education, and entrepreneurial infrastructure to maintain long-term growth.

Discussion:

In April, the Arizona 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 a considerable 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 Arizona office provides R&D tax credit consulting and advisory services to Phoenix, Tucson, Mesa, Chandler, Glendale, Scottsdale, Gilbert, Tempe, Peoria and Surprise.

Feel free to book a quick teleconference with one of R&D tax specialists at a time that is convenient for you, 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.