North Carolina inventionINDEX July 2026: 1.61% (A- 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).

Historical North Carolina inventionINDEX Scores

The North Carolina inventionINDEX score for the past 12 months is shown in the table below.

The July 2026 North Carolina inventionINDEX score of 1.61% (A-) represents a moderate contraction compared to recent high-performing months, sitting slightly below the historical 60-month mean of 1.74%. This latest reading reflects a 0.29 percentage point drop from June 2026 (1.90%, A+) and a 0.12 percentage point reduction from May 2026 (1.73%, A+). On a year-over-year basis, the July 2026 metric shows a noticeable shift from the peak July 2025 score of 2.47% (A+) and a smaller dip from July 2024 (1.83%, A+). While the score remains in solid upper-tier territory, it places the state near the lower bound of its typical operating range over the past calendar year.

Contextualized within the broader dataset spanning July 2021 through July 2026, the current rating reflects a mid-tier placement in North Carolina’s historical trajectory. The state reached its highest benchmarks of 2.47% in both October 2024 and July 2025, maintaining an A+ rating across 31 of the 61 tracked months. Conversely, the index touched its historical low point in December 2021 at 1.12% (C+), followed by a steady upward recovery throughout 2022 and 2023. Although July 2026 stays well clear of those earlier structural troughs, the shift from A+ to A- indicates a temporary pause in momentum following sustained high performance throughout late 2025 and early 2026.

Achieving a higher inventionINDEX score yields substantial economic and strategic advantages for North Carolina’s innovation ecosystem. High grades in the A to A+ range reflect robust intellectual property generation, active research and development, and efficient commercialization across universities and private industry. These elevated ratings build market confidence, attracting institutional venture capital, corporate research partnerships, and skilled scientific talent to the region. Consistently high scores also reinforce the state’s standing as a premier innovation hub, driving new business formation and expanding regional employment.

Conversely, lower index scores and grade contractions introduce notable risk factors for state growth. A prolonged downward trend toward B or C grade tiers points to potential friction in research funding, reduced patent filing volume, or broader macroeconomic headwinds. Lower scores can dampen investor enthusiasm, leading capital to flow toward competing technology markets and slowing the commercialization of emerging discoveries. If unaddressed, persistent lower scores risk weakening economic dynamism and constraining the overall throughput of North Carolina’s invention pipeline.

Discussion:

In July, the North Carolina inventionINDEX scored a positive 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 North Carolina office provides R&D tax credit consulting and advisory services to Charlotte, Raleigh, Greensboro, Durham, Winston Salem, Fayetteville, Cary, Wilmington, High Point, Greenville, Asheville, Concord, Gastonia, Jacksonville, Chapel Hill, Rocky Mount, Huntersville, Burlington, Wilson and Kannapolis

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.