February 2026: 0.99% (C- grade)

Arkansas inventionINDEX February 2026: 0.99% (C- 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).

Arkansas inventionINDEX Scores – Last 12 months

The February 2026 inventionINDEX score of 0.99 percent with a C- rating represents a noticeable softening in the innovation performance of Arkansas compared to the data from the last few years. This latest figure is a decrease from the 1.15 percent recorded in January 2026 and stands in stark contrast to the historical high of 1.94 percent reached in October 2023. Over the last 60 months, the index has largely hovered in the B and C ranges, with the current score falling toward the lower end of that spectrum. This decline places the state’s innovation output back near the levels seen during previous lulls, such as the 0.76 percent low in October 2022, suggesting a current period of relative inactivity.

Higher grades within the index, particularly those in the A category, typically signal a period of robust economic health and forward-thinking development. When the score climbs, it indicates that the state is successfully translating ideas into intellectual property and potential commercial ventures. These peaks often foster an environment that attracts external investment, as a high rating demonstrates a reliable pipeline of new products and processes. Furthermore, a higher grade tends to boost confidence among local stakeholders, encouraging further investment in education and infrastructure that supports the creative and scientific communities.

On the other hand, lower scores and ratings like the current C- carry several negative implications for the state’s economic outlook. A drop in the index may suggest that local inventors are facing increased barriers to entry, whether through lack of funding, reduced access to research facilities, or broader economic headwinds. Such a trend can lead to a brain drain where talented individuals seek more supportive environments elsewhere, ultimately weakening the competitive edge of the region. If these lower scores persist, it could signal a slowdown in the modernization of local industries, making the regional economy more vulnerable to shifts in global markets.

Examining the full 60-month historical table reveals a pattern of volatility that underscores the sensitive nature of the innovation economy. While the current score of 0.99 percent is a setback, the data shows that Arkansas has historically demonstrated the ability to rebound quickly from similar positions. For instance, the recovery from the 2022 low led to some of the highest scores on record just one year later. Moving forward, it will be essential for policymakers and business leaders to analyze the factors contributing to these fluctuations to ensure that the state can return to the consistent B or A ratings that signify a truly thriving invention landscape.

Discussion:

In February, the Arkansas inventionINDEX scored a negative sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is in contrast 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’s Arkansas office provides R&D tax credit consulting and advisory services to Little Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff and Bentonville.

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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