What is the inventionINDEX?

The inventionINDEX is a data-driven framework developed by Swanson Reed to measure innovation output by correlating patent production with economic growth using a statistical baseline.

How is the inventionINDEX calculated?

It uses a Linear Regression Trend Line based on historical data (1999-2019) to project normal patent output and compares current actuals against this baseline.

inventionINDEX: Analyzing Patent Activity and R&D

Key Takeaways

Data-Driven Framework: The inventionINDEX correlates patent production with economic growth using rigorous statistical baselines rather than subjective awards.
Trend Analysis: Utilizes a “Pre-COVID” linear regression baseline (1999-2019) to project and compare current patent activity.
Economic Indicator: Patent activity is treated as a leading indicator of GDP; high scores suggest future economic recovery.
Reliable and Continuous Data: inventionINDEX has published data for all 50 states for every month since the year 2020.

What is inventionINDEX?

Swanson Reed’s inventionINDEX is a innovation metric designed to track, analyze, and highlight patent activity and its relationship to GDP overtime. The central mechanism of the index is a comparative trend analysis rather than a simple count of patents. inventionINDEX includes a traffic light warning system intended to detect patent production deficiency before it becomes irreversibly structural.

The traffic light warning system awards a green light if the state or country scored a ‘C’ Grade or better for at least one month in a thirteen month period. A yellow light is awarded if the state or country scored less than a ‘C’ Grade for a thirteen consecutive month period. The country or state will be awarded a red light if it scores less than a ‘C’ grade for a thirty-six month consecutive (or 3 year) period.

Swanson Reed encourages Governments to stay on alert during the approximately 24 month yellow light phase, so it can take immediate action once the red light is activated. Swanson Reed recommends that Governments introduce its patent grant program within 90 days once a red light is achieved, meaning that monitoring during the yellow light phase is essential. Swanson Reed’s Patent Grant Program aims to stall structural stagnation in a worse case senario and reverse it completely in its best case scenario.

The “Pre-COVID” Baseline (The Trend Line)

Data Range: The system utilizes a long-term historical dataset, specifically tracking patent data from January 1999 through December 2019 (approximately 20 years).
Linear Regression: Instead of using a static “average” (which implies stagnation), the methodology calculates a Linear Regression Trend Line.
Formula: It derives a Gradient/Slope (m) and Y-Intercept (c) from the pre-COVID era to project what the “normal” patent output should be for any given future month.

The “Post-COVID” Comparison

Actual vs. Projected: For current months (e.g., 2020–2025), the actual number of patents granted is compared against the projected baseline value derived from the 1999–2019 trend.
Sentiment Score: The difference is calculated as a percentage deviation. If a state produces more patents than the historical trend predicts, it receives a positive score; if fewer, a negative score.

Grading Scale

The numerical percentage is converted into a letter grade to assess the “sentiment” or outlook of the innovation economy:

Grade	Performance Description	Economic Implication
A+ (Excellent)	Performance significantly exceeds the baseline (e.g., > 1.5% above trend).	Indicates a thriving R&D sector and predicts future GDP growth.
B to C (Stable/Neutral)	Performance is roughly on par with the 20-year historical trend.	Indicates stable innovation output consistent with historical norms.
D to F (Negative)	Performance is significantly below the baseline (e.g., < -2% below trend).	Signals a contraction in innovation and potential economic stagnation.

Learn more

Click here to read Swanson Reed’s whitepaper on the theory of inventionINDEX
Click here to read Swanson Reed’s whitepaper on the application of inventionINDEX
Click here to learn inventionINDEX’s methodology
Click here to learn inventionINDEX’s early warning system
Click here to compare inventionINDEX to other innovation indices
Click here to understand the importance and smoothing effect of inventionINDEX’s baseline
Click here to read how Swanson Reed’s Patent Grant policy could help reverse an early inventionINDEX warning

What are Patent Grants?

In a September 2025 report from Swanson Reed’s Patent Grants Think Tank, the authors propose reforming the U.S. patent system—citing examination backlogs, low-quality grants, and litigation by Non-Practicing Entities that raise costs and hinder innovation. They recommend a Collaborative Examination Pathway (CEP), an optional, front-loaded USPTO track that fosters early applicant–examiner collaboration using AI tools and a secure digital platform to improve patent quality, shorten pendency, and bolster legal certainty. The report also calls for a federal grant of up to $50,000 per international patent family to help small businesses cover patenting costs, and suggests using Swanson Reed’s inventionINDEX—which links patent output with GDP growth—as a simple metric to gauge innovation and measure program outcomes. Learn more

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Use the interactive map below to access data for every month since 2020, for all 50 states, representing thousands of individual analyses:

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Alabama inventionINDEX

Arizona inventionINDEX

Mississippi inventionINDEX

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