ARIZONA INVENTION INDEX – MARCH 2023

The Invention Index measures a country’s or state’s innovation output by comparing GDP growth with patent production growth. 

Arizona Invention Index March 2023: 2.21% (B grade)

Arizona Invention Index over the last year:

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 Arizona 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 in contrast to the prior 12 months, which experienced a downward trend. There has been no sudden drop in patent numbers, despite the evolving situation with Covid-19. However, it is possible that these approvals are happening on patents applied for prior to the Covid-19 outbreak. If this is the case, 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.

• Positive Outcomes of a Higher Score:

  • Economic Growth: A higher Invention Index indicates robust innovation activity, which can lead to economic expansion as new technologies and products stimulate markets.​

  • Attracting Investment: Strong innovation metrics can attract venture capital and other forms of investment, fostering further research and development.​

  • Job Creation: Increased patent activity often correlates with job creation in high-tech and manufacturing sectors, contributing to overall employment rates.​

  • Enhanced Reputation: Consistently high scores can bolster a state’s reputation as a hub for innovation, attracting talent and businesses.​

• Negative Implications of a Lower Score:

  • Economic Stagnation: A declining Invention Index may signal reduced innovation, potentially leading to slower economic growth.​

  • Reduced Investment: Lower innovation activity can deter investors seeking dynamic and forward-thinking environments.​

  • Job Losses: A downturn in patent production might result in fewer opportunities in research and development fields, impacting employment.​

  • Diminished Competitiveness: Falling behind in innovation can make a region less competitive compared to others, affecting its position in the national or global market.

Learn more about the Invention Index here.

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 contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.

Who We Are:

Swanson Reed is one of the U.S.’ largest Specialist R&D tax advisory firms. We manage all facets of the R&D tax credit program, from claim preparation and audit compliance to claim disputes.

Swanson Reed regularly hosts free webinars and provides free IRS CE and CPE credits for CPAs.  For more information please visit us at www.swansonreed.com/webinars or contact your usual Swanson Reed representative.