June 2026: 3.39% (A+ grade)

Arizona inventionINDEX June 2026: 3.39% (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 Arizona inventionINDEX Scores

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

The recent performance of the Arizona inventionINDEX demonstrates a resilient upswing, with June 2026 closing at an impressive 3.39% and earning an A+ rating. This reflects a solid recovery from the lower scores observed earlier in the year, such as the 2.09% recorded in April 2026, which carried a B rating. When evaluated against the long-term historical average of approximately 2.81% over the past sixty months, the latest data points signal that the innovation ecosystem is currently performing above its historical baseline. While these recent numbers demonstrate strong momentum, they remain below the extraordinary historical peak observed in early 2024, illustrating the cyclical nature of innovation metrics within the region.

A closer inspection of the historical timeline reveals significant volatility and notable milestones that define the trajectory of the index. The absolute pinnacle of the index occurred in January 2024, when the score surged to an unprecedented 7.25% with an A+ rating. Conversely, the lowest point over this sixty-month period was recorded in July 2023, dropping to 1.44% and resulting in a C+ rating. Analyzing these fluctuations indicates that while the index frequently shifts between periods of contraction and expansion, it maintains an overall steady foundation, with the majority of months clustering near the upper-B and lower-A grade distributions.

Achieving a higher score and an elite grade, such as an A or A+, yields highly positive outcomes for the regional economy. High marks signify a thriving environment for intellectual property development, increased patent activity, and robust entrepreneurial confidence. This strong performance serves as a powerful signal to venture capitalists and corporate leaders, attracting substantial external investment and fostering high-value job creation. Ultimately, elevated index scores indicate that the strategic initiatives and research infrastructure in Arizona are successfully driving technological advancement and economic competitiveness.

On the other hand, a lower score and a depressed rating, such as those in the B- or C+ range, carry serious negative implications for the state. A declining index often points to systemic bottlenecks, such as a reduction in research funding, decreased commercialization efficiency, or a temporary slowdown in creative output. If these lower performance levels persist, they can diminish investor confidence, discourage top-tier talent from relocating to the region, and lead to broader economic stagnation in the technology sectors. Consequently, lower scores underscore the urgent need for targeted policy adjustments and enhanced public-private partnerships to revitalize the local innovation framework.

Discussion:

In June, the Arizona 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 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 Arizona office provides R&D tax credit consulting and advisory services to Phoenix, Tucson, Mesa, Chandler, Glendale, Scottsdale, Gilbert, Tempe, Peoria and Surprise

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.