ARIZONA INVENTIONINDEX | JUNE 2025
June 2025: 2.24% (B grade)
Arizona inventionINDEX June 2025: 2.24% (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).
The Arizona inventionINDEX score for June 2025 stands at 2.24%, marking a decline from May’s high of 3.77%. This drop represents the steepest month-over-month decrease in the past year, suggesting a potential slowdown in patenting activity or innovation output for the state. While the score remains within a healthy range, the shift indicates a recalibration after a particularly strong showing in May, which may have been influenced by the release of several high-value patents or concentrated R\&D investment in the preceding quarter.
Looking at the broader trend, Arizona’s inventionINDEX has remained relatively robust throughout the last 12 months, rarely dipping below 2%. Notably, the state posted a similarly low score of 2.21% in November 2024, but quickly rebounded in December and January. This recurring pattern of dips followed by stabilization may suggest that Arizona’s innovation ecosystem is cyclical, influenced by funding cycles, academic calendars, or industrial product development timelines. The June 2025 score, though lower than the recent average, still compares favorably to several other months such as August (2.38%) and December (2.79%).
A higher inventionINDEX score typically signals a surge in inventive activity, which can reflect stronger economic prospects, increased investment in research, and greater institutional output. For Arizona, a high score could enhance its competitiveness in securing federal grants, attracting venture capital, and luring high-tech firms seeking innovative ecosystems. Additionally, it could translate into job creation across R\&D, legal, and manufacturing sectors, amplifying the broader impact of the innovation economy.
Conversely, if the current dip becomes a trend rather than a blip, it may signal weakening momentum. A sustained lower score could suggest a slowdown in patent filings or stagnation in commercialization pathways. For policymakers and research institutions, this could point to the need for targeted interventions-such as innovation incentives or increased support for startups-to maintain Arizona’s competitive edge. Monitoring the next quarter’s data will be key in determining whether June’s result is an outlier or an early warning sign.
Discussion:
In June, 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 if you would like to learn more about R&D tax credit opportunities.
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