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).

Iowa inventionINDEX Scores – Last 12 months

The Iowa inventionINDEX for March 2026 concluded at 1.72%, securing an A+ rating and demonstrating a resilient return to top-tier performance. This score marks a significant monthly increase from the 1.26% recorded in February 2026. Although the current figure sits slightly below the 1.87% high seen in January 2026 and the 1.94% peak from December 2025, the general trajectory remains exceptionally positive. The recent data suggests that the brief contraction in February was a temporary outlier rather than a systemic decline, as the state continues to operate well above the baseline innovation levels seen in previous years.

Evaluating the index over a five-year horizon reveals that Iowa is currently enjoying one of its most productive eras in recent history. The March score of 1.72% is a far cry from the historical floor of 0.88% experienced in July 2022, which yielded a D+ rating. For much of 2023 and 2024, the state struggled to break out of the C and B-tier ranges, with frequent scores hovering around 1.10%. The transition into a consistent A+ environment starting in mid-2025 highlights a structural shift in the state’s innovative capacity, moving away from the volatility of the early 2020s toward a more sophisticated and reliable output of intellectual property.

Achieving a sustained A+ rating provides Iowa with a formidable competitive advantage in the national economy. High scores typically reflect a flourishing ecosystem of research, development, and commercialization, which serves as a vital signal to venture capitalists and industrial partners. When the inventionINDEX remains elevated, it often results in increased funding for local startups and more aggressive patenting activity from established institutions. Furthermore, these top-tier grades foster a virtuous cycle of talent recruitment, as highly skilled engineers and researchers are drawn to regions where innovation is actively supported and quantified as a core economic strength.

Conversely, a descent into lower ratings, such as the D+ and C- scores recorded in 2022 and 2023, carries heavy implications for the state’s long-term growth. Lower scores often indicate a stagnation in the development of new technologies or a failure to successfully bridge the gap between academic research and the commercial market. If the index remains low for an extended period, it can trigger a brain drain effect, where local talent migrates to more dynamic innovation hubs in search of better resources. This potential loss of intellectual capital underscores the importance of maintaining the current A+ momentum to prevent a return to the periods of underperformance that previously hindered the state’s technological advancement.

Discussion:

In March, the Iowa 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 an 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.