COLORADO INVENTIONINDEX | JANUARY 2026

January 2026: 1.24% (B- grade)

Colorado inventionINDEX January 2026: 1.24% (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).

Colorado inventionINDEX Scores – Last 12 months

The January 2026 Colorado inventionINDEX score of 1.24% with a B- rating indicates a notable contraction when viewed against the performance of the last five years. This latest figure matches the low point seen in June 2022 and sits only slightly above the five-year minimum of 1.21% recorded in December 2021. Throughout the sixty-month history provided, the index has frequently reached into the A+ range, often exceeding 2.00%. The current score represents a significant departure from the robust innovation levels observed during peak periods, such as October 2023 when the index reached its historical high of 2.44%.

Analyzing the historical trajectory reveals that the index has experienced several fluctuations, but the recent trend shows a downward lean. For much of 2024 and the first half of 2025, the Colorado inventionINDEX maintained a strong profile, consistently earning A or A+ ratings. However, the drop from 1.55% in December 2025 to 1.24% in January 2026 suggests a loss of momentum as the new year begins. This shift is particularly striking when compared to the same month in previous years, such as January 2024 and January 2025, which both boasted scores above 1.75% and elite ratings.

A higher inventionINDEX score carries several positive implications for the regional economy and the broader creative community. When the grade reaches the A+ tier, it typically signifies a fertile environment where new ideas are actively being developed and brought to market. High scores often correlate with increased investment in research and development, as well as a greater willingness among entrepreneurs to take risks. These periods of high performance reflect a healthy pipeline of innovation that can lead to job creation, technological advancement, and a strengthened competitive position for the state in national and global markets.

Conversely, lower scores and diminished ratings like the current B- grade present several negative implications. A decline in the index can indicate that the barriers to innovation have become more pronounced, perhaps due to rising costs, limited access to capital, or a general decline in market confidence. If the score remains at these lower levels, it may signal a period of stagnation that could discourage potential inventors and lead to a brain drain of talent to more active regions. Such a downturn necessitates a careful evaluation of the factors stifling creativity, as a prolonged period of low scores could impact the long-term growth and diversity of the local economy.

Discussion:

In January, the Colorado inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the downward trend for the year. This is similar to the prior 12 months, which experienced a slight downward 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 Colorado office provides R&D tax credit consulting and advisory services to Denver, Colorado Springs, Aurora, Fort Collins, Lakewood, Thornton, Arvada, Westminster, Pueblo and Centennial.

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.