Indiana inventionINDEX August 2026: 1.40% (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 August 2026 reached 1.40% with a B+ rating, marking a notable recovery following several months of lower metrics earlier in the year. This figure reflects a significant rebound from the multi-year low of 1.05% recorded in January 2026 and April’s 1.15% reading. When evaluated across the broader 60-month historical timeline, current levels demonstrate encouraging upward momentum, though they remain beneath the extraordinary peak of 2.26% achieved in November 2023. Looking back to the earlier baseline from August 2021 through mid-2022, scores frequently hovered in the upper 1.40% to 1.61% range, indicating that while recent momentum is strong, the state continues to rebuild toward its historic high points.

A closer examination of the five-year trend highlights distinct cycles in regional innovation output and commercial growth. Between late 2021 and mid-2023, the index consistently maintained elevated ratings, driven by high patent production relative to state gross domestic product. Following the historical high-water mark in late 2023, performance entered a period of tighter compression during 2024 and 2025, where ratings clustered predominantly around the B- and C+ tiers. Intermittent rallies, such as July 2025 at 1.53% and December 2024 at 1.49%, demonstrated residual strength within the ecosystem, yet the overall trajectory shifted toward lower valuation windows. The steady rise through mid-2026 suggests an inflection point where state innovation metrics are regaining ground against long-term averages.

Securing higher inventionINDEX scores yields substantial economic benefits, as an elevated rating reflects a thriving intellectual property pipeline and high-yield technological development. When scores ascend into the A and upper-B brackets, it indicates that patent growth is outpacing general economic growth, signaling robust corporate research spending and effective academic technology transfer. Higher grades serve as a powerful beacon for external venture capital, fostering job creation across advanced manufacturing, biotechnology, and software development. Furthermore, strong innovation indicators bolster Indiana’s reputation as an attractive destination for top-tier engineering talent and high-growth entrepreneurial ventures.

Conversely, persistent declines or lower ratings carry clear strategic challenges for the state’s broader economic health. When the index drops into the C or C+ ranges, as observed during January 2026 or May 2024, it highlights potential bottlenecks in commercializing research, tighter corporate R&D budgets, or broader macroeconomic headwinds. A prolonged stretch of depressed scores can diminish regional competitiveness, risking talent migration to more dynamic innovation hubs and reducing the flow of private capital investment. Sustaining policy momentum and targeted research funding remains essential to protecting the state against economic deceleration and ensuring long-term technological leadership.

Discussion:

In August, 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 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.