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).

Montana inventionINDEX Scores – Last 12 months

The Montana inventionINDEX recently recorded a score of 4.31 percent for February 2026, maintaining its prestigious A+ rating. This reflects a notable increase from the 2.95 percent observed in January 2026, though it remains slightly below the 5.22 percent peak seen in December 2025. This fluctuation suggests a dynamic environment where innovation activity is consistently present but subject to monthly variance. By sustaining an A+ rating throughout the past year, the state demonstrates a resilient foundation for intellectual property development and creative enterprise.

When examining the broader sixty-month trajectory, the current scores represent a significant period of stability compared to the volatility seen in early 2021. For instance, the index reached a historic high of 11.13 percent in November 2022, a level that set a high benchmark for subsequent years. In contrast, the middle of 2021 saw a sharp decline to a low of 0.68 percent and a D rating. The recovery since that period has been substantial, with the index rarely dipping below the 2 percent threshold in recent years, indicating that Montana has successfully professionalized and scaled its invention ecosystem.

Higher scores and top-tier grades carry significant weight for the regional economy. An A+ rating signals to investors and entrepreneurs that the state provides a fertile ground for new ideas and technological advancements. These high scores often correlate with increased patent filings, higher venture capital interest, and a robust pipeline of talent moving into high-tech sectors. Furthermore, a sustained high grade fosters a culture of excellence that encourages local institutions and private businesses to continue investing in research and development, ultimately driving long-term economic prosperity.

Conversely, a decline in the inventionINDEX score or a lower rating can serve as a warning sign for the state’s economic health. Lower scores typically indicate a slowdown in the translation of ideas into marketable assets, which may stem from reduced funding, a brain drain of creative talent, or a lack of institutional support. If the index were to return to the lower levels seen several years ago, it could lead to a loss of competitive edge against neighboring regions and a stagnation in job creation within specialized fields. Monitoring these shifts allows policymakers to identify when intervention or additional incentives are necessary to keep the engine of Montana innovation running efficiently.

Discussion:

In February, the Montana 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 considerable 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 Montana office provides R&D tax credit consulting and advisory services to Billings, Missoula, Great Falls, Bozeman, and Butte.

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.