January 2026: 0.71% (F grade)
New Jersey inventionINDEX January 2026: 0.71% (F 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).
New Jersey inventionINDEX Scores – Last 12 months
| Month | inventionINDEX Score |
| January 2026 | 0.71% |
| Dec 25 | 0.87% |
| Nov 25 | 0.85% |
| Oct 25 | 0.82% |
| Sep 25 | 0.94% |
| Aug 25 | 1.47% |
| Jul 25 | 0.98% |
| Jun 25 | 0.78% |
| May 25 | 0.90% |
| Apr 25 | 0.87% |
| Mar 25 | 0.78% |
| Feb 25 | 0.80% |
| Jan 25 | 0.84% |
The January 2026 New Jersey inventionINDEX score of 0.71% marks a challenging start to the year, placing the current standing significantly below the historical 60-month average of approximately 0.94%. This latest “F” rating indicates a period of contraction when compared to the performance observed over the last five years. While the index has shown resilience in the past, the current level sits near the bottom of the historical range, only slightly above the five-year low of 0.68% recorded in November 2024. This suggests that the regional innovation landscape is currently experiencing a cooling phase following the volatile shifts seen throughout 2025.
A broader review of the historical data reveals that the New Jersey inventionINDEX is capable of substantial peaks, most notably the record high of 1.47% achieved in August 2025. During that month, the index earned an “A+” rating, demonstrating the potential for exceptional growth and technological advancement. However, the subsequent five months have seen a steady decline, dropping from that peak to the current 0.71%. Over the last 60 months, the index has frequently fluctuated between the 0.80% and 1.15% range, meaning the current performance is an outlier on the lower end of the spectrum that warrants closer examination by industry stakeholders.
The positive outcomes of achieving a higher grade, such as the “B+” and “A+” ratings seen in early 2021 and mid-2025, are multifaceted and vital for regional prosperity. Higher scores typically correlate with increased research and development activity, a surge in patent filings, and a more attractive environment for venture capital investment. When the index reaches these elevated levels, it signals to the global market that New Jersey is a primary hub for intellectual property creation and commercialization. Such performance fosters a virtuous cycle of job creation in high-tech sectors and strengthens the overall economic competitiveness of the state.
Conversely, the negative implications of a lower score and rating, like the current “F” grade, suggest a stagnation in the local innovation pipeline. Persistent low scores can lead to reduced investor confidence and a potential brain drain as talent seeks more active ecosystems. A score of 0.71% may reflect external economic pressures, a decrease in corporate innovation spending, or a temporary lull in major breakthroughs. To maintain its status as a leader in invention, the state must address the factors contributing to these lower ratings to ensure the index returns toward its historical mean and eventually surpasses previous highs.
Discussion:
In January, the New Jersey inventionINDEX scored a negative sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is in contrast 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 New Jersey office provides R&D tax credit consulting and advisory services to Newark, Jersey City, Paterson, Elizabeth, Edison, Woodbridge, Lakewood, Toms River, Hamilton, and Trenton.
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.
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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.
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What is the R&D Tax Credit?
The Research & Experimentation Tax Credit (or R&D Tax Credit), is a general business tax credit under Internal Revenue Code section 41 for companies that incur research and development (R&D) costs in the United States. The credits are a tax incentive for performing qualified research in the United States, resulting in a credit to a tax return. For the first three years of R&D claims, 6% of the total qualified research expenses (QRE) form the gross credit. In the 4th year of claims and beyond, a base amount is calculated, and an adjusted expense line is multiplied times 14%. Click here to learn more.
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