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

The New Jersey inventionINDEX has recently experienced a period of notable contraction, with the February 2026 score settling at 0.77 percent. While this represents a marginal improvement over the January 2026 low of 0.71 percent, the current rating of F indicates a significant departure from the more robust performance levels seen in previous years. When viewed against the five-year trajectory, the index is currently struggling to find its footing after a volatile transition from the end of 2025. This downward trend suggests a cooling period in the regional innovation landscape, contrasting sharply with the relative stability observed during the earlier segments of the 60-month window.

A comparative analysis of the historical data reveals that the current scores are far below the peak performance levels reached in mid-2025. Specifically, the August 2025 score of 1.47 percent, which earned an A+ rating, stands as a benchmark for the potential of the New Jersey inventive ecosystem. Throughout 2021 and 2022, the index frequently touched the B range, reflecting a more consistent and healthy output of intellectual property and creative development. The transition from these higher historical marks to the frequent D and F ratings seen over the last several months highlights a loss of momentum that requires careful evaluation by stakeholders and industry leaders.

The achievement of a higher grade on the inventionINDEX brings several positive outcomes that strengthen the regional economy. High scores, such as the B and A ratings seen intermittently over the last five years, signal a fertile environment for technological advancement and entrepreneurial success. These elevated scores often correlate with increased venture capital interest, higher rates of patent filings, and a general atmosphere of confidence that attracts top-tier talent to the state. When the index performs well, it serves as a leading indicator of future economic growth, suggesting that the local infrastructure is effectively supporting the journey from a conceptual idea to a tangible, marketable innovation.

Conversely, the persistence of lower scores and failing ratings carries serious negative implications for New Jersey’s competitive standing. A sustained period of low scores, like the one currently being observed, often points to systemic barriers such as reduced research and development funding, a lack of institutional support, or a migration of intellectual capital to more favorable jurisdictions. If these scores do not improve, the region risks a stagnation of its industrial sectors and a decline in its reputation as a hub for progress. Addressing the factors that contribute to these D and F ratings is essential for reversing the current trend and restoring the index to the levels of excellence seen in previous cycles.

Discussion:

In February, the New Jersey inventionINDEX scored a negative 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 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.

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. 

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