July 2025: 2.23% (A+ grade)

Colorado inventionINDEX July 2025: 2.23% (A+ 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

Based on the historical data provided for the past 60 months, the Colorado inventionINDEX demonstrates a consistently strong performance, with the majority of scores earning a rating of “A” or higher. The scores generally fluctuate within a positive range, with an average performance that consistently suggests a healthy inventive economy. A notable peak occurred in October 2023, with a score of 2.44% and an A+ rating, while the lowest point was observed in December 2021, with a score of 1.21% and a B- rating. The most recent data from July 2025 shows a strong score of 2.23%, indicating a robust and encouraging start to the current fiscal quarter.

A higher inventionINDEX score and a corresponding top-tier rating, such as the numerous A+ grades observed in the table, signal a thriving environment for innovation. A robust score, which often reflects strong patent production relative to GDP growth, is a powerful indicator of a forward-looking and dynamic economy. This positive trend can be instrumental in attracting both domestic and international investment, encouraging new business formation, and drawing top talent to the state. The consistent achievement of high scores over the past five years underscores a resilient and deeply embedded culture of invention that is critical for long-term economic prosperity and competitiveness.

Conversely, a lower inventionINDEX score carries negative implications that warrant careful consideration. A dip in the score, such as the B and B- ratings seen periodically throughout the table, could suggest a potential slowdown in the pace of inventive activity or a lagging performance in comparison to overall economic growth. While minor fluctuations are natural, a sustained downward trend could be a leading indicator of future challenges, including reduced research and development investment, a less competitive business landscape, and a potential exodus of innovative companies and skilled professionals. These lower scores serve as a crucial signal for stakeholders to evaluate and reinforce policies that support the innovation ecosystem.

In conclusion, the historical table reveals a state with a strong and generally upward trajectory in its inventive output. The occasional lower ratings highlight the importance of continuous support for innovation, but the predominant high scores, especially the strong recent performance in July 2025, paint a positive picture of the state’s capacity for invention. This metric provides a valuable benchmark for understanding the health of the innovation economy and for making strategic decisions to ensure sustained growth and leadership in the years ahead.

Discussion:

In July, the Colorado inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the upward trend for the year. This is in contrast 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.