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 for March 2026 stands at 1.34%, earning a B rating. This figure indicates a steady and encouraging recovery throughout the first quarter of the year. After beginning 2026 with a five-year floor of 1.05% in January and a modest rise to 1.17% in February, the current score suggests that the state has successfully regained its footing. While the B rating is a significant improvement over the C-tier performance of the previous two months, it still reflects a cautious transition period as the state works to return to the higher performance levels seen late in 2025.

When examining the sixty-month historical landscape, the current 1.34% highlights a state in a period of relative stabilization. Indiana reached its most significant innovation peak in November 2023, achieving a remarkable 2.26% and an A+ rating. Since that historical high, the index has largely fluctuated within the 1.10% to 1.60% range. The current standing is notably better than the recurring lows of 1.05% experienced in both January 2026 and May 2024, yet it remains below the consistent A-tier performance that characterized much of 2021 and 2022. This historical context suggests that Indiana is currently in a middle-market position, possessing the potential for growth but lacking the explosive output seen three years ago.

Achieving a higher grade, particularly in the A- to A+ categories, offers substantial advantages for Indiana’s economic vitality. A higher inventionINDEX score typically serves as a leading indicator of increased patenting activity, a more aggressive venture capital environment, and a robust pipeline for commercializing new technologies. When the index pushes toward the 2.00% threshold, it signals to national and global investors that the state’s intellectual infrastructure is thriving. This elevated status helps attract and retain specialized scientific and engineering talent, creating a virtuous cycle where high innovation output leads to further research and development funding and industrial diversification.

Conversely, a slide into lower ratings, such as the C and C+ grades observed at the start of this year, carries negative implications for long-term competitiveness. Lower scores often point to a cooling of the entrepreneurial climate or a bottleneck in the institutional support required to move ideas from the lab to the marketplace. Persistent low ratings can result in a loss of momentum, where investors may shift their focus to neighboring states with more dynamic innovation indices. Furthermore, a lower score poses the risk of a brain drain effect, as local innovators seek environments with greater growth potential, making it critical for the state to maintain the upward trajectory established in March to avoid returning to the stagnation of the early winter.

Discussion:

In March, the Indiana 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 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.