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).

Nevada inventionINDEX Scores – Last 12 months

The February 2026 inventionINDEX score of 1.82 percent represents a notable recovery for Nevada compared to the lower yields observed during the winter months of late 2025. With a B- rating, this latest figure marks the strongest performance since September 2025, when the index reached 2.05 percent. The jump from January 2026’s 1.14 percent suggests a renewed momentum in regional innovation sectors. While the score remains below the 2 percent threshold seen intermittently over the last two years, the current trajectory reflects a stabilizing trend that moves away from the mediocre C ratings that characterized much of the final quarter of 2025.

When analyzing the sixty-month horizon, the current score is positioned well above the historical lows encountered in early 2022. For instance, January 2022 saw a record low of -0.06 percent with a D- rating, illustrating a period of severe stagnation in regional creative output. In contrast, the standout peak of 3.85 percent in February 2024 remains the gold standard for the index, representing a level of activity more than double the current output. The data reveals a cyclical nature where brief bursts of high-tier activity, such as the B ratings in mid-2024 and mid-2025, are often followed by corrections into the C and D ranges. The current B- rating places Nevada in a competitive middle ground, demonstrating significantly better health than the average performance seen throughout most of 2022 and 2023.

Higher grades within the inventionINDEX carry substantial weight for the economic landscape of the state. When the rating reaches a B or higher, it typically correlates with an environment ripe for venture capital investment and a surge in intellectual property filings. These elevated scores signal that the infrastructure for research and development is functioning efficiently, providing the necessary support for startups and established technology firms to thrive. A robust index score often translates to higher job creation in high-tech sectors and a more diversified economy that is less dependent on traditional service industries. This upward movement encourages a culture of entrepreneurship where new ideas are more likely to reach the commercialization stage successfully.

Conversely, lower scores like the D ratings seen during much of 2022 suggest significant hurdles in the innovation pipeline. A lower index score often points toward a lack of available seed funding, a brain drain of talent to more competitive regions, or a regulatory environment that may be stifling creative output. When the rating drops into the D+ or C- categories, it serves as a warning sign for policy makers and business leaders that the local ecosystem is losing its competitive edge. This stagnation can lead to reduced long-term growth and a slower recovery from broader economic downturns. Maintaining the current B- trajectory is essential for Nevada to avoid the pitfalls of past troughs and ensure a consistent environment for future technological advancement.

Discussion:

In February, the Nevada 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 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 Nevada office provides R&D tax credit consulting and advisory services to Las Vegas, Henderson, Reno, North Las Vegas, Sparks, Carson City, Fernley, Elko, Mesquite, and Boulder City.

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.