May 2026: 1.47% (B- grade)

Minnesota inventionINDEX May 2026: 1.47% (B- grade)

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).

Minnesota inventionINDEX Scores – Last 12 months

The Minnesota inventionINDEX for May 2026 stands at 1.47 percent, earning a B-minus rating. This figure marks a solid recovery from the 1.23 percent recorded in April 2026, which had dropped to a C-plus rating. However, it represents a step back from the stronger performances seen earlier in the year, such as March at 2.07 percent and February at 1.86 percent. When compared to the long-term historical baseline, the current score sits slightly below the 60-month average of approximately 1.64 percent. This positioning indicates that while the local innovation ecosystem is demonstrating resilience and recovering from a brief springtime dip, it is currently operating in a moderate growth phase rather than reaching its full potential.

A broader review of the 60-month historical timeline highlights the cyclical fluctuations within the index, revealing several periods of high growth and notable contraction. The index achieved its absolute peak in July 2025 with an impressive score of 2.59 percent, securing an A-plus rating. This high point followed other strong periods, including January 2024 at 2.32 percent and August 2023 at 2.33 percent. Conversely, the lowest score in the 60-month history occurred in April 2023, when the index bottomed out at 0.91 percent with a C-minus rating. The current score of 1.47 percent reflects a stabilized middle ground, showing that the region has successfully avoided the severe contractions of 2023 while working to recapture the peak momentum experienced in mid-2025.

Achieving higher grades within the A and B tiers yields significant positive outcomes for the regional economy and its technological sectors. An elevated inventionINDEX score serves as a strong indicator of flourishing research activities, active patent applications, and high entrepreneurial confidence. These superior ratings act as a powerful signal to venture capitalists and corporate investors, attracting necessary capital to accelerate the development and commercialization of new technologies. Furthermore, sustained high scores foster the creation of high-paying jobs, expand institutional research funding, and enhance the overall competitiveness of the state on a global scale.

In contrast, lower scores and diminished ratings carry serious negative implications for the innovation pipeline. When the index dips into the C tier or lower, it often reflects underlying economic bottlenecks, reduced corporate spending on research and development, or a lack of supportive infrastructure for new startups. Prolonged periods of low scores can lead to a loss of momentum, causing top-tier research talent to migrate to more active markets. Additionally, lower ratings can induce investor caution, making it difficult for early-stage companies to secure funding, which ultimately stalls technological breakthroughs and slows regional economic growth.

Discussion:

In May, the Minnesota 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 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.