FEDERAL INVENTIONINDEX | JANUARY 2026

January 2026: 1.22% (C+ grade)

Federal inventionINDEX January 2026: 1.22% (C+ 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).

Federal inventionINDEX Scores – Last 12 months

The January 2026 inventionINDEX score of 1.22% represents a notable dip in the five-year historical trajectory. When viewed against the backdrop of the provided 60-month dataset, this current C+ rating places the index near its historical floor, closely mirroring the 1.18% recorded in January 2022. This performance suggests a period of contraction or consolidation within the federal innovation landscape. While the index has frequently oscillated between 1.30% and 1.60%, the recent descent from the 1.54% seen in December 2025 indicates a sharp monthly decline that warrants close observation by stakeholders.

Comparing this current figure to historical peaks reveals a significant gap in performance. The index reached its zenith in October 2023 with a score of 2.31% and an A+ rating, marking a period of exceptional inventive vitality. Since that high point, the scores have exhibited considerable volatility, with several A+ peaks occurring as recently as July 2025 at 1.95%. The transition from an A+ to a C+ over a six-month period highlights a rapid shift in the metrics that define the index. This historical variance demonstrates that while the system is capable of high-level output, it is currently struggling to maintain the momentum established during the mid-2025 recovery phase.

Achieving a higher grade, such as the A or A+ ratings frequently observed in 2023 and 2024, carries substantial positive weight for the federal ecosystem. These elevated scores typically correlate with increased efficiency in research and development, a higher volume of patented breakthroughs, and more effective collaboration between public and private sectors. A high inventionINDEX score serves as a leading indicator of economic competitiveness and technological leadership. When the rating remains in the A range, it suggests that resource allocation is optimized and that the environment is conducive to high-impact intellectual property creation, which ultimately drives long-term growth and national security.

Conversely, the negative implications of a lower score, such as the current 1.22%, point toward systemic friction or reduced output capacity. A C+ rating may signal a stagnation in new filings, delays in the development pipeline, or a broader reduction in the capital being deployed toward innovative projects. If this downward trend persists, it could lead to a loss of competitive advantage and a slower pace of technological advancement. To reverse this trajectory, it is necessary to identify the specific bottlenecks that have caused the index to retreat from its previous B+ and A- standings. Sustained performance in the lower quartiles risks a long-term decline in the overall health of the federal innovation framework.

Discussion:

In January, the Federal inventionINDEX 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 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.

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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