New York inventionINDEX February 2026: 1.02% (C 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 York inventionINDEX Scores – Last 12 months

The latest New York inventionINDEX score for February 2026 stands at 1.02 percent, earning a C rating. This represents a noteworthy recovery from the preceding month of January 2026, which saw the index drop to a near-historic low of 0.77 percent. When comparing this current figure to the broader historical data set spanning the last five years, it is evident that the index is currently operating within a more moderate range than the highs observed during the 2021 period. For instance, the index reached a peak of 1.70 percent in March 2021. The current score suggests a period of stabilization as the market attempts to move away from the D ratings that characterized several months of the past year.

A higher inventionINDEX score, such as the B and A ratings seen frequently in 2021 and 2022, signifies a robust environment for innovation and commercial viability. In months such as August 2021 and August 2023, the score reached 1.57 percent, achieving a solid A rating. These elevated grades typically correlate with increased investor confidence, higher rates of patent filings, and a more aggressive pursuit of new technological developments. When the index trends upward toward these historical peaks, it reflects a healthy ecosystem where creative capital is efficiently utilized, leading to long-term economic growth and a competitive edge in global markets. The shift from 0.77 percent in January to 1.02 percent in February illustrates a positive change in momentum that could foster a more optimistic outlook for the coming quarters.

Conversely, the lower scores observed in the latter half of 2025 and the beginning of 2026 present several economic challenges. The D and D+ ratings, which ranged from 0.77 percent to 0.90 percent during this interval, indicate a stagnation in inventive activity or a lack of market support for new ideas. A lower index often suggests a more cautious investment climate where capital is withheld from riskier, high-potential projects. For example, the December 2022 score of 0.76 percent and the January 2026 score of 0.77 percent represent periods where the innovation pipeline faced significant headwinds. Such downturns can lead to a decrease in the development of breakthrough technologies, potentially causing the region to lose ground to other innovation hubs that maintain more consistent upward trajectories.

Evaluating the 60-month trajectory reveals a cyclic nature to the New York inventionINDEX, with the current C rating representing a middle ground between extreme volatility and peak performance. While the current 1.02 percent is notably below the A+ ratings of late 2021, it demonstrates resilience following the recent dip into the D category. Maintaining and improving upon this score is essential for sustaining a vibrant economic environment. As the region moves forward, the goal will be to recapture the momentum seen in years like 2021, where scores regularly exceeded 1.30 percent. Achieving these higher benchmarks will require a concerted effort to support the underlying drivers of innovation, ensuring that the index returns to a position of strength and leadership.

Discussion:

In February, the New York 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 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 York office provides R&D tax credit consulting and advisory services to New York City, Buffalo, Rochester, Yonkers, Syracuse, Albany, New Rochelle, Mount Vernon, Schenectady, Utica, White Plains, Troy, Niagara Falls, Binghamton, Rome, Long Beach, Poughkeepsie, North Tonawanda, Jamestown and Ithaca.

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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