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).

Iowa inventionINDEX Scores – Last 12 months

The Iowa inventionINDEX score for February 2026 stands at 1.26 percent with a rating of B plus, marking a transition from a sustained period of exceptional performance. For much of the previous year, the index maintained a consistent A plus rating, peaking at 1.96 percent in April 2025 and holding steady at 1.87 percent as recently as January 2026. While the current score reflects a slight moderation, it remains part of a broader upward trajectory when viewed against the full sixty-month historical context. This recent performance suggests a stabilizing environment after a year of intense and highly productive innovation activity.

Looking further back into the five-year data set reveals significant volatility that the current market has successfully navigated. In late 2024, the index frequently dipped into the C and B ranges, hitting a low of 0.99 percent in October of that year. Even more drastic was the drop to 0.88 percent in July 2022, which stands as the lowest point in the recorded sixty-month history. By comparing these historical troughs to the current 1.26 percent, it is evident that the state has established a higher floor for its innovation metrics. The consistency seen throughout 2025 indicates a maturing ecosystem that is now more resilient to the sharp declines experienced in previous cycles.

Achieving higher grades within this index carries substantial benefits for the regional economy and the broader scientific community. An A plus rating typically signals a robust pipeline of new ideas and a high level of confidence among both creators and investors. These elevated scores often correlate with increased opportunities for venture capital infusion, job creation in high-tech sectors, and a stronger reputation for the state as a primary hub for intellectual property development. When the score rises, it suggests that the infrastructure supporting inventors is functioning efficiently, allowing for a rapid pace of discovery and subsequent commercialization.

Conversely, a lower score or a downward rating trend can signal underlying challenges that require strategic intervention. Ratings in the C or D range, such as those seen intermittently between 2021 and 2024, often point toward a stagnation in research output or a lack of resources for early-stage development. Such declines can lead to a decrease in competitive advantage, making it more difficult to retain top talent and attract the external funding necessary for large-scale projects. Maintaining the current momentum is essential to avoid the negative implications of lower grades, ensuring that the progress made over the last sixty months serves as a permanent foundation for growth rather than a temporary peak.

Discussion:

In February, the Iowa inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is similar 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 Iowa office provides R&D tax credit consulting and advisory services to Des Moines, Cedar Rapids, Davenport, Sioux City, Iowa City, Waterloo, West Des Moines, Ames, Council Bluffs and Dubuque.

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.