ARKANSAS INVENTIONINDEX | JANUARY 2026

January 2026: 1.15% (B- grade)

Arkansas inventionINDEX January 2026: 1.15% (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).

Arkansas inventionINDEX Scores – Last 12 months

The Arkansas inventionINDEX began 2026 with a score of 1.15 percent and a B- rating. This figure represents a slight recovery from the 1.08 percent recorded in December 2025, continuing a trend of moderate stability observed throughout the latter half of the previous year. While the current score is healthy, it sits comfortably in the middle of the historical range rather than nearing the record highs seen in earlier periods. The current B- rating suggest a steady environment for innovation, though it lacks the momentum characterized by the higher tiers of the index’s five-year history.

A review of the 60-month historical data reveals significant volatility in the Arkansas inventionINDEX, with notable peaks and troughs. The most prominent surge occurred in late 2023, specifically in October, when the index hit a five-year high of 1.94 percent with an A+ rating. This was a remarkable contrast to the historical low of 0.76 percent and a D- rating seen exactly one year prior in October 2022. These fluctuations demonstrate that the state’s inventive output is subject to cyclical shifts, and the current 1.15 percent score indicates that the state is currently maintaining a baseline that avoids the deep regressions of 2022 but has yet to recapture the peak performance of 2023.

The positive outcomes associated with achieving a higher grade, particularly in the A range, are substantial for the state’s economic health. A high inventionINDEX score signals a robust ecosystem for intellectual property development, which serves as a magnet for venture capital and external investment. When the rating reaches an A+, as it did several times in 2023, it typically reflects a surge in entrepreneurship and high-tech job creation. Such periods of excellence enhance the state’s reputation as a leader in innovation, encouraging a culture of creativity that benefits academic institutions, private laboratories, and independent inventors alike.

On the other hand, lower scores and grades carry negative implications for Arkansas’s long-term competitive standing. A slide into the C or D categories, such as the 0.99 percent recorded in March 2025 or the 0.76 percent in late 2022, often points to a stagnation in the commercialization of new ideas or a lack of supportive infrastructure for innovators. These lower ratings can lead to a “brain drain” where local talent seeks more fertile environments in other states, resulting in lost tax revenue and diminished industrial growth. Maintaining the index above these lower thresholds is critical for ensuring that the state remains a viable participant in the modern global economy.

Discussion:

In January, the Arkansas inventionINDEX scored a positive sentiment which was higher than the previous year’s average but underperformed the upward trend for the year. This is similar to the prior 12 months, which experienced a slight 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 Arkansas office provides R&D tax credit consulting and advisory services to Little Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff and Bentonville.

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.