Hawaii inventionINDEX August 2026: 1.17% (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).

Historical Hawaii inventionINDEX Scores

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

The August 2026 Hawaii inventionINDEX score of 1.17% with a C+ rating represents a modest rebound from July 2026 (1.01%, C), while remaining below the multi-year historical average of 1.34%. This score matches May 2026 and March 2025 levels, indicating a period of stabilization following the notable peak in June 2026 (2.86%, A+). Compared to the same month last year (August 2025 at 0.84%, D+), the current metric reflects a meaningful year-over-year improvement of 0.33 percentage points, demonstrating greater foundational resilience despite falling short of top-tier performance tiers seen earlier in the year.

Examining the broader 60-month historical continuum reveals significant volatility within the index, spanning an all-time high of 3.03% (A+) in July 2024 and a record low of 0.50% (F) in June 2024. Over the observed five-year timeline, top-tier ratings such as A+ (15 instances) and C+ (13 instances) have been the most frequent designations, accounting for nearly half of all monthly records. The recent trajectory shows that while the index frequently reaches high-performing thresholds like 1.85% (achieved four times in 2026 alone), current performance sits closer to the median benchmark of 1.17%, placing Hawaii in a mid-range cyclical phase.

Higher inventionINDEX scores and grades deliver strong positive signals for the local innovation ecosystem. When the index reaches A-level ratings (1.51% to 3.03%), it typically reflects heightened patent filing velocity, elevated venture capital deployment, and strong cross-sector technology transfer. A higher grade bolsters investor confidence, attracts out-of-state talent, and accelerates product commercialization. This virtuous cycle enhances Hawaii’s competitive standing in national innovation rankings, creating high-value jobs and expanding the state’s knowledge-based economic sector.

Conversely, lower scores and diminished letter grades carry serious strategic disadvantages for the regional economy. Sub-1.00% scores—such as the D and F ratings observed in June 2024 (0.50%) or February 2025 (0.67%)—signal severe contractions in research output, reduced institutional funding, or systemic bottlenecks in intellectual property generation. Persistent low ratings risk chilling institutional investment, encouraging talent flight to major mainland tech hubs, and slowing down regional economic diversification efforts, ultimately leaving local enterprises vulnerable during broader market shifts.

Discussion:

In August, the Hawaii inventionINDEX scored a positive 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 Hawaii office provides R&D tax credit consulting and advisory services to Honolulu, East Honolulu, Pearl City, Hilo and Kailua

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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