June 2026: 1.65% (A- grade)

Federal inventionINDEX June 2026: 1.65% (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).

Historical Federal inventionINDEX Scores

The Federal inventionINDEX score for the past 12 months is shown in the table below.

The recent performance of the Federal inventionINDEX in June 2026 demonstrates a notable resilience, positioning itself at 1.65% with an A- rating. This latest figure represents a significant recovery from the historical low recorded just two months prior in April 2026, where the score dipped sharply to 1.05% with a C rating. When evaluated against the broader historical trajectory, the June 2026 score sits comfortably above the long-term historical average of approximately 1.55%. This indicates that despite the pronounced volatility observed in the first half of 2026, the index is regaining momentum and tracking toward the upper tier of its performance spectrum, rebounding effectively from a period of brief stagnation.

Looking closer at the 60-month historical data, the index has experienced several distinct cycles of growth and contraction. The absolute peak of the inventionINDEX occurred in October 2023, reaching an impressive 2.31% with an A+ rating, followed closely by August 2023 at 2.20%. In comparison, the subsequent years of 2024 and 2025 maintained a more moderate yet steady baseline, frequently hovering within the 1.30% to 1.60% range. The sharp decline in the early months of 2026 highlighted a brief period of vulnerability, but the subsequent upward shift in May and June mirrors similar historical recoveries, such as the resilient rebound seen after the index dropped to 1.18% in January 2022.

Achieving a higher score and a superior grade, such as the A-tier ratings observed during peak historical periods, yields several positive outcomes for the broader economic and technological landscape. High index scores signal robust innovative vitality, efficient research and development pipelines, and an acceleration of breakthrough advancements across industries. This strong performance fosters substantial investor confidence, encourages capital deployment into emerging technologies, and elevates organizational reputations on a global scale. Furthermore, elevated grades validate strategic investments in intellectual property, ensuring that research efforts translate into tangible market advantages and sustainable economic growth.

Conversely, a lower score and a depreciated grade, such as the C rating witnessed in April 2026, carry serious negative implications for long-term progress. Depressed index values typically reflect systemic bottlenecks in innovation, underfunded research initiatives, or a general stagnation in creative output. These lower ratings can diminish stakeholder trust, leading to reduced financial backing and a potential loss of competitive advantages to international counterparts. When the index remains low over consecutive months, it underscores a pressing need for structural adjustments, indicating that existing frameworks are failing to cultivate or sustain the necessary environment for meaningful technological expansion.

Discussion:

In June, 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 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 provides R&D tax credit consulting and advisory services to companies in all 50 U.S. States.

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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