August 2025: 0.84% (D+ grade)

Hawaii inventionINDEX August 2025: 0.84% (D+ 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).

Hawaii inventionINDEX Scores – Last 12 months

The inventionINDEX historical data reveals a varied performance over the last 60 months, with significant fluctuations that highlight the dynamic nature of innovation. The most recent score of 0.84% in August 2025, corresponding to a D+ rating, represents a notable decline from the previous month’s A- rating and 1.51% score. This recent dip is not an isolated event but is consistent with a pattern of volatility. For instance, the score also fell sharply from a peak of 3.03% in July 2024 to 0.50% just one month later in June 2024. This historical trend suggests that while the inventionINDEX can reach high points, it is also susceptible to swift downturns, making sustained high performance a key challenge.

A high inventionINDEX score, such as the A+ rating achieved with a 3.03% score in July 2024, is typically indicative of robust innovation and a strong pipeline of successful intellectual property. Such performance often attracts significant investment, as it signals to stakeholders and potential investors that the entity is at the forefront of its field. High scores can be a powerful metric for measuring a company’s competitive edge and long-term viability, suggesting a healthy, forward-thinking organization. The consistent A+ ratings seen throughout the data, particularly in September 2024, July 2024, and June 2023, demonstrate periods of exceptional inventive output and market leadership.

Conversely, a lower score on the inventionINDEX, such as the F rating for the 0.50% score in June 2024 or the D- rating for the 0.67% scores in February 2025 and February 2024, points to potential areas of concern. These lower scores can signal a slowdown in inventive activity, a lack of impactful innovations, or a failure to capitalize on new market opportunities. Such outcomes can lead to a decrease in investor confidence, challenges in securing funding for future projects, and a potential loss of competitive standing. A sustained period of lower scores might suggest deeper systemic issues related to research and development, strategy, or market adaptation.

In summary, the inventionINDEX serves as a critical barometer for measuring the health and vitality of an innovation ecosystem. The historical data underscores that while high scores are a testament to periods of significant success and a positive outlook, the frequent presence of lower scores highlights the ongoing need for vigilance and adaptation. The cyclical nature of the index, with its dramatic highs and lows, reinforces the importance of continuous innovation and strategic planning to not only achieve but also maintain a position of market leadership.

Discussion:

In August, the Hawaii inventionINDEX scored a negative sentiment which was lower than the previous year’s average and underperformed the downward trend for the year. This is in contrast to the prior 12 months, which experienced an 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 Hawaii office provides R&D tax credit consulting and advisory services to Honolulu, East Honolulu, Pearl City, Hilo and Kailua.

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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