Arizona inventionINDEX September 2026: 3.10% (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 September 2026 Arizona inventionINDEX score of 3.10 percent, accompanied by an A rating, marks a strong recovery following a brief mid-year slowdown. This result represents a substantial rebound from July 2026, when the score dropped to 1.71 percent with a B- rating, and August 2026, which posted a modest 2.04 percent with a B rating. When evaluated against the broader historical record spanning September 2021 to September 2026, the latest figure comfortably exceeds both the 60-month historical average of 2.78 percent and the trailing 12-month average of 2.63 percent. While it falls below the multi-year peak of 7.25 percent recorded in January 2024, September 2026 aligns closely with strong expansionary periods such as June 2026 at 3.39 percent and May 2026 at 3.15 percent, signaling renewed strength in regional innovative momentum.

A deeper review of the 60-month dataset reveals recurring performance cycles characterized by pronounced shifts between seasonal troughs and expansionary surges. The index frequently dips during mid-summer months, as seen in July 2022 at 1.92 percent, July 2023 at 1.44 percent, and July 2026 at 1.71 percent, before recovering during late summer and early autumn. Conversely, periods of elevated activity routinely propel the score above 3.00 percent, earning grade A or A+ designations in months like November 2021, March 2022, May 2025, and July 2025. September 2026 fits neatly into this historical trend of autumn acceleration, re-establishing a trajectory above the median benchmark of 2.79 percent and demonstrating the resilience of the underlying innovation pipeline over time.

Achieving a higher score and an elite rating such as A or A+ yields numerous positive outcomes for the regional innovation ecosystem. A strong inventionINDEX score signals heightened intellectual property generation, robust research output, and active commercialization efforts across key industries. Higher scores boost venture capital confidence, encourage institutional investment, and attract top-tier technical talent seeking dynamic market environments. Furthermore, consistent top-tier ratings bolster regional economic prestige, providing policymakers and business leaders with tangible evidence of healthy enterprise creation and sustained technological expansion.

Conversely, prolonged declines or sudden drops into lower rating tiers, such as B- or C+, present distinct negative implications for economic stakeholders. Lower scores reflect contracted invention disclosures, reduced patent application velocity, or systemic bottlenecks in research and development funding. When the index remains depressed near historic lows like July 2023’s 1.44 percent or April 2022’s 1.59 percent, it indicates potential macroeconomic uncertainty, cautious capital deployment, or institutional sluggishness. Left unaddressed, persistent underperformance risks weakening competitive standing, dampening startup formation, and slowing overall economic productivity.

Discussion:

In September, 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 a considerable 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.

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