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).

Michigan inventionINDEX Scores – Last 12 months

The Michigan inventionINDEX score for March 2026 reached 1.73%, resulting in a B- rating. This performance represents a significant and much-needed rebound from the stagnation observed at the start of the year. In January and February of 2026, the index languished at 0.89% and 0.85% respectively, both earning C- ratings. This sharp upward movement in March suggests a revitalization in the state’s innovation pipeline, effectively ending a two-month period of relative inactivity. By crossing back into the B-tier, Michigan indicates that its creative output is once again outpacing basic economic growth, signaling a healthy shift toward a more knowledge-based momentum as the second quarter approaches.

When examining the historical trajectory over the last 60 months, the March 2026 score stands out as a strong year-over-year improvement. In March 2025, the index was a mere 0.80%, and in March 2024, it sat at 1.52%. While the current 1.73% is a robust figure, it remains well below the historic peaks achieved in September 2023 (3.09%) and October 2024 (2.97%), both of which earned A+ ratings. However, the current stability is a welcome departure from the high volatility seen in 2023, a year that saw the index swing from a historic low of -0.11% in July to an A+ just two months later. This current B- rating suggests a more sustainable and less erratic growth pattern than those previous cycles.

A higher grade on the inventionINDEX, particularly in the A or B ranges, carries substantial benefits for Michigan’s economic infrastructure. High scores typically reflect a surge in patent filings, increased research and development spending, and a vibrant startup culture that attracts venture capital. When the index performs well, it serves as a signal to global investors that the state possesses a fertile environment for technological advancement and industrial modernization. These periods of high inventive activity often lead to the creation of high-wage jobs and the diversification of the local economy, ensuring that the state remains competitive in an increasingly globalized market for intellectual property.

Conversely, a lower index score or a descent into the D or F categories presents serious implications for the state’s long-term health. Low ratings, such as those seen during the July 2023 and October 2023 dips, suggest a bottleneck in the transition from conceptual research to protected innovation. If these periods of low productivity persist, they can lead to a loss of specialized talent as researchers and engineers seek more dynamic ecosystems elsewhere. Furthermore, a consistently low score can discourage institutional investment and slow the pace of industrial automation and efficiency. By monitoring these fluctuations, stakeholders can better understand when to implement strategic support to prevent the stagnation that accompanies lower-tier ratings.

Discussion:

In March, the Michigan 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 Michigan office provides R&D tax credit consulting and advisory services to Detroit, Grand Rapids, Warren, Sterling Heights, Ann Arbor, Lansing, Flint, Dearborn, Livonia, Troy, Westland, Farmington Hills, Kalamazoo, Wyoming, Rochester Hills, Southfield, Taylor, Pontiac, St Clair Shores

 and Royal Oak.

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.