FEDERAL INVENTIONINDEX | SEPTEMBER 2025

September 2025: 1.66% (A- grade)

Federal inventionINDEX September 2025: 1.66% (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).

Federal inventionINDEX Scores – Last 12 months

The Federal inventionINDEX for September 2025 stands at 1.66%, earning an A- grade. This score indicates a positive sentiment regarding innovation output. Comparing this to the preceding 59 months, September 2025’s performance is notably higher than the average score observed over the past year, and it also demonstrates an improvement over the downward trend that characterized the previous 12-month period. This suggests a potential stabilization or resurgence in innovation activity.

A higher inventionINDEX grade, such as the A- received in September 2025, generally signifies robust innovation output, which can be a strong indicator of economic health and future growth potential. Positive outcomes associated with such grades include increased patent production, which often correlates with advancements in technology and industry. This can lead to job creation, enhanced global competitiveness, and a more resilient economy capable of adapting to various challenges. A consistent pattern of higher grades can attract investment and foster an environment conducive to further research and development.

Conversely, a lower inventionINDEX score carries negative implications for economic prospects. A decline in the index suggests a slowdown in innovation, which could be a symptom of underlying economic weaknesses, reduced investment in research and development, or a decrease in entrepreneurial activity. Such a downturn might lead to a stagnation in technological progress, a loss of competitive edge, and a more challenging environment for economic recovery, particularly in the face of unforeseen economic incidents.

Analyzing the historical data, the inventionINDEX has fluctuated over the past 60 months, with periods of both strong performance and more modest outcomes. While September 2025 shows a positive shift, the broader trend over the past few years has included several instances of lower scores, sometimes dipping to a C+ grade. Understanding these past fluctuations, including the impact of external factors such as the post-pandemic economic stabilization, is crucial for interpreting the current score and anticipating future trends in innovation and economic recovery.

Discussion:

In September, the Federal inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is similar to the prior 12 months, which experienced a 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.

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. 

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