Indiana inventionINDEX February 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).

Indiana inventionINDEX Scores – Last 12 months

The Indiana inventionINDEX began 2026 with a degree of resilience, posting a 1.17 percent score in February. This represents a recovery from the 1.05 percent low seen in January 2026, moving the rating from a C to a C+. While this progress is incremental, it demonstrates a move away from the weakest performance level recorded in the past five years. However, when placed in the context of the broader 60-month trajectory, the current score reveals a cooling trend. Throughout much of 2024 and 2025, the index frequently stayed above the 1.30 percent threshold, making the recent sub-1.20 percent scores a cause for closer observation by stakeholders.

Historical analysis shows that the state has reached much higher summits in the past. The most notable achievement occurred in November 2023, when the index spiked to an impressive 2.26 percent with an A+ rating. Other strong periods include the spring of 2021, where scores consistently landed between 1.42 percent and 1.77 percent. The current February 2026 score of 1.17 percent is significantly detached from these past peaks, indicating that the pace of invention and intellectual property development has slowed. This comparison highlights a cycle of innovation that appears to be currently navigating a trough after the high-energy output characterized by the 2021 to 2023 era.

High grades on the inventionINDEX are indicative of a thriving economic environment fueled by intellectual curiosity and commercial viability. When the score reaches the A-range, it signals that the state is successfully converting academic research and private ingenuity into tangible assets. The positive outcomes of such high performance include increased interest from national venture capital groups and a boost in the state’s reputation as a technology hub. A higher grade also correlates with a more robust workforce, as innovative companies require a high volume of skilled professionals to scale their operations. Ultimately, a strong index score serves as a leading indicator for future economic prosperity and industrial modernization.

On the other hand, lower scores and the associated C-range ratings carry negative implications that require attention. A lower score often reflects a decrease in new patent activity or a slowdown in the rate at which new technologies are being introduced to the market. This stagnation can lead to reduced investor confidence and a potential decrease in high-paying job opportunities within the tech sector. Furthermore, if the index continues to linger at lower levels, it may suggest that the local infrastructure for supporting startups and inventors is underperforming or lacks sufficient funding. Maintaining a competitive position requires a concerted effort to reverse these downward trends and return to the higher historical benchmarks that have previously defined the Indiana innovation landscape.

Discussion:

In February, the Indiana inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed 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 Indiana office provides R&D tax credit consulting and advisory services to Indianapolis, Fort Wayne, Evansville, South Bend, Carmel, Fishers, Bloomington, Hammond, Gary and Lafayette.

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.