June 2026: 1.65% (A+ grade)

Alabama 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 Alabama inventionINDEX Scores

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

The Alabama inventionINDEX reached a robust 1.65% in June 2026, securing an A+ rating and demonstrating strong momentum compared to immediately preceding periods. This score marks a clear improvement over May 2026’s 1.53% rating and represents a notable rebound from the early spring baseline of 1.16% recorded in April and February 2026. Across the entire 61-month historical dataset spanning from June 2021 through June 2026, the overall monthly average score stands at approximately 1.37%. The June 2026 result comfortably exceeds this five-year average by 28 basis points. While the current score remains below the historical peak of 2.15% achieved in January 2024, it sits far above the historical floor of 0.86% observed during low points such as November 2025 and November 2024.

A comparative year-over-year analysis highlights that June 2026 represents the single strongest June performance recorded in the five-year history of the index. By comparison, June 2025 registered at a modest 0.99% with a C- rating, June 2024 came in at 1.11% with a C+ rating, June 2023 yielded 1.32% with a B+ rating, June 2022 generated 1.16% with a B- rating, and June 2021 scored 1.53% with an A+ rating. Across all 61 months evaluated, top-tier A+ grades account for 22 occurrences, representing over 36 percent of all reporting periods. The recent upward trajectory indicates that after a period of consolidation during late 2025 and early 2026, the state’s innovation metrics have successfully returned to top-tier territory.

Sustaining a high score and achieving an A+ rating carries significant positive economic and strategic outcomes for the state’s innovation ecosystem. Strong ratings reflect a flourishing pipeline of commercialization activity, active intellectual property generation, and expanded research and development output. High grades instil greater confidence among venture capital firms, institutional investors, and enterprise partners seeking promising markets for capital deployment. Furthermore, sustained high scores enhance the regional reputation as a competitive technology hub, helping to attract elite scientific talent, secure federal research grants, and accelerate the growth of local startups.

Conversely, periods marked by lower scores and degraded ratings, such as the D+ ratings recorded in November 2025 and November 2024, carry notable negative implications. Diminished scores point to friction in patent processing, reduced private-sector R&D funding, or temporary contractions in technology transfer. Extended periods of lower performance risk dampening investor engagement, weakening regional competitiveness against neighboring markets, and creating potential capital or talent flight. Monitoring these historical fluctuations allows stakeholders to identify seasonal patterns, address structural bottlenecks, and safeguard long-term economic growth.

Discussion:

In June, the Alabama inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is in contrast to the prior 12 months, which experienced a slight 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 Alabama office provides R&D tax credit consulting and advisory services to Birmingham, Montgomery, Mobile, Huntsville, Tuscaloosa, Hoover, Dothan, Auburn, Decatur and Madison

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.

Swanson Reed hosts daily free webinars and provides free IRS CE and CPE credits for CPAs. For more information please visit us at www.swansonreed.com/free-webinars or contact your usual Swanson Reed representative.