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).

Minnesota inventionINDEX Scores – Last 12 months

The Minnesota inventionINDEX for March 2026 reached 2.07 percent, securing an A rating and signaling a robust period of creative acceleration for the state. This performance represents a significant and consistent climb throughout the first quarter of the year, following a softer start in January at 1.43 percent and a strong February showing of 1.86 percent. By surpassing the 2.00 percent threshold, Minnesota demonstrates that its innovation output is currently operating at an elite level, outpacing general economic trends and reflecting a fertile environment for new intellectual property development.

In comparison to the historical 60-month dataset, the current score reflects a substantial recovery from previous spring cycles. The March 2026 performance is notably stronger than March 2025, which saw a modest 1.18 percent, and March 2023, which languished at 1.01 percent. While the current index has not quite reached the all-time peak of 2.59 percent recorded in July 2025, it is currently tracking as one of the strongest March performances in recent history, nearly mirroring the 2.04 percent achieved in March 2022. This upward trajectory suggests that the state has successfully moved past the volatility observed in late 2022 and early 2023.

Sustaining a high score within the A or A+ range provides the state with several strategic advantages. An elevated inventionINDEX typically correlates with an increase in patent filings, a surge in research and development investment, and heightened interest from venture capital firms looking for the next technological breakthrough. These periods of high productivity often foster a virtuous cycle of talent attraction, where the state’s reputation as an innovation hub draws in skilled engineers and scientists. Ultimately, these positive outcomes translate into the creation of high-wage jobs and the modernization of local industries, ensuring that Minnesota remains a national leader in the knowledge economy.

Conversely, when the index drops into the C range or below, such as the 0.91 percent recorded in April 2023, the implications for the state’s economic future are concerning. A lower score suggests a period of stagnation where the rate of new discoveries is failing to keep pace with the broader economy, potentially leading to a loss of competitive edge. The negative consequences of a sustained low rating include a reduction in startup activity and the risk of a brain drain, as innovators may relocate to states with more dynamic support systems. By monitoring these fluctuations, stakeholders can better identify when the state needs to recalibrate its incentives or bolster its institutional support to prevent a long-term decline in inventive output.

Discussion:

In March, the Minnesota 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 Minnesota office provides R&D tax credit consulting and advisory services to Minneapolis, Saint Paul, Rochester, Duluth, Bloomington, Brooklyn Park, Plymouth, Maple Grove, Woodbury, and St Cloud.

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.