Indiana inventionINDEX July 2026: 1.21% (B- 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 Indiana inventionINDEX Scores

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

The Indiana inventionINDEX for July 2026 registered at 1.21% with a B- rating, reflecting a modest uptick from June 2026 (1.20%, B-) and May 2026 (1.19%, C+), yet remaining visibly lower than earlier historical highs. Across the 60-month historical timeline, the index exhibits notable fluctuation around an overall median score of 1.31% and a mean of 1.34%. In comparison to the robust activity seen in late 2021 and 2022, where monthly averages regularly exceeded 1.40%, recent figures reflect a period of stabilization at lower valuation tiers. The absolute peak occurred in November 2023, when the index reached an extraordinary 2.26% with an A+ rating, driven by an exceptional surge in regional innovation activities. Examining the trailing window reveals that while recent scores have stabilized above the multi-year low of 1.05% recorded in January 2026, current metrics remain below the historical benchmark.

A comparative evaluation against prior years demonstrates a gradual shift in Indiana’s innovation trajectory. During 2021 and 2022, top-tier ratings were frequent, highlighted by August 2022 (1.59%, A), May 2022 (1.61%, A), and August 2021 (1.61%, A). In contrast, performance across late 2025 and 2026 shows a tighter cluster around C+ and B- ratings, with the 2025 to 2026 average standing at approximately 1.24%. While intermittent rallies occurred—such as July 2025 hitting 1.53% (A-) and December 2024 reaching 1.49% (A-)—the prevailing trend over the past two years points toward compressed score margins. Comparing the current 1.21% level to the overall dataset underscores that state innovation output is currently running approximately 13 basis points below its long-term average.

Securing a higher inventionINDEX grade generates substantive economic and structural benefits for the state. A strong score, particularly in the A to A+ range, signifies an active intellectual property ecosystem, high venture capital interest, and robust commercialization of research across universities and private enterprise. Higher ratings enhance investor confidence, attracting out-of-state private equity and federal research funding into Indiana technology corridors. Additionally, elevated innovation metrics correlate with advanced manufacturing growth, higher-paying research and development jobs, and expanded patent output, solidifying the region as an attractive hub for top-tier technical talent and entrepreneurial ventures.

Conversely, persistent lower scores carry meaningful economic challenges and strategic vulnerabilities. When the index drops toward C or C+ levels, as seen in January 2026 (1.05%) or May 2024 (1.05%), it signals a slowdown in commercial technology development and reduced patent generation. Prolonged periods of depressed metrics can lead to capital flight, as investors reallocate funds toward more dynamic regional markets. Furthermore, lower ratings may indicate bottlenecks in research translation, reduced corporate innovation budgets, and heightened susceptibility to broader economic headwinds, ultimately undermining Indiana’s long-term competitiveness in high-growth industrial sectors.

Discussion:

In July, the Indiana inventionINDEX scored a positive sentiment which was lower than the previous year’s average but outperformed the downward trend for the year. This is similar 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 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.