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).

Massachusetts inventionINDEX Scores – Last 12 months

The February 2026 inventionINDEX score for Massachusetts stands at 1.10 percent, earning a C+ rating. This figure marks a marginal recovery from the previous month, where the index hit a five-year low of 1.04 percent and a C rating in January 2026. While any upward movement is a welcome sign, the current score suggests a period of relative stagnation when compared to the broader historical context. The index has spent much of the last several months fluctuating between the C and B- ranges, indicating a departure from the more robust performance levels observed in previous cycles.

Looking back over the last sixty months, the current state of the index highlights a significant downward trend from its historical peaks. In October 2023, the score reached a high of 1.92 percent with an A+ rating, showcasing a period of intense creative output and economic momentum. Since that time, the index has struggled to maintain such elevated levels, frequently dipping into the lower tiers. The current 1.10 percent score is notably lower than the average performance seen in 2021 and 2022, when ratings consistently hovered in the A and B+ categories. This shift suggests that the local innovation environment is facing headwinds that were not as prevalent in the early part of this five-year window.

When the inventionINDEX achieves a higher grade, such as the A+ ratings seen throughout 2023 and early 2022, it signals a thriving ecosystem characterized by high levels of patent activity and research development. These higher scores often correlate with increased venture capital interest and a greater ability to attract top-tier global talent to the region. A robust score acts as a catalyst for economic growth, fostering an environment where new technologies can transition quickly from the laboratory to the marketplace. This leads to job creation in high-value sectors and reinforces the reputation of the state as a primary hub for global innovation.

Conversely, the recent shift toward lower scores like the current C+ rating carries several negative implications for the long-term health of the innovation sector. Persistent low ratings can indicate a slowdown in the pipeline of new ideas or a lack of the necessary infrastructure to support emerging inventors. If the score remains depressed, there is a risk of losing competitive advantages to other regions that are seeing more rapid growth in their intellectual property portfolios. This stagnation might result in reduced funding for research and a potential exodus of specialized professionals. Addressing these dips is essential to ensure that the region does not lose its standing as a leader in the technological landscape.

Discussion:

In February, the Massachusetts inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed 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 Massachusetts office provides R&D tax credit consulting and advisory services to Boston, Worcester, Springfield, Lowell, Cambridge, New Bedford, Brockton, Quincy, Lynn and Fall River.

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.