January 2026: 1.02% (C+ grade)
North Dakota inventionINDEX January 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).
North Dakota inventionINDEX Scores – Last 12 months
| Month | inventionINDEX Score |
| January 2026 | 1.02% |
| Dec 25 | 1.02% |
| Nov 25 | 1.04% |
| Oct 25 | 1.04% |
| Sep 25 | 1.23% |
| Aug 25 | 1.02% |
| Jul 25 | 1.16% |
| Jun 25 | 1.06% |
| May 25 | 1.19% |
| Apr 25 | 1.00% |
| Mar 25 | 1.06% |
| Feb 25 | 1.08% |
| Jan 25 | 1.14% |
The January 2026 inventionINDEX score for North Dakota remains steady at 1.02%, yielding a C+ rating. This figure mirrors the performance of the preceding month, suggesting a period of stabilization following the more volatile shifts observed throughout late 2025. When viewed against the broader 60-month horizon, this current standing is notably lower than the peak of 1.23% achieved in September 2025. Historically, the index has experienced significant highs, such as the 1.17% and 1.14% marks frequently recorded in 2023 and 2024, indicating that the present state reflects a conservative phase in the regional innovation cycle.
Achieving a higher grade, such as the A+ ratings observed when the index exceeds 1.12%, serves as a powerful indicator of robust economic vitality. These elevated scores often correlate with a surge in patent filings, increased research and development funding, and a more competitive environment for technology startups within the state. When North Dakota maintains scores in the 1.10% to 1.23% range, it signals to investors and policymakers that the infrastructure for creation and intellectual property development is functioning at an optimal level. Such periods of high performance foster an environment where high-value jobs are created and the local economy becomes more resilient against national financial shifts.
Conversely, a lower score and rating, such as the current 1.02% or the historical low of 0.96% recorded in October 2022, present specific challenges for the state. A dip into the C or D rating categories suggests a potential deceleration in the pace of inventive output or a shift in capital allocation away from innovation-heavy sectors. These lower metrics can imply that fewer new ideas are being transitioned into the commercial market, which may eventually lead to a stagnant talent pool if skilled professionals seek more active hubs elsewhere. While a 1.02% score is notably higher than the historical floor, it serves as a signal that the momentum observed during the A-rated months of early 2025 has temporarily slowed.
Evaluating the inventionINDEX over the last five years reveals a narrative of cyclical growth and periodic adjustment. Despite the current cooling to a C+ rating, the historical data shows that North Dakota has a proven capacity to rebound into the A+ range relatively quickly. The consistency of the scores, which rarely fall below the 1.00% threshold, demonstrates a foundational stability in the state’s approach to innovation. By analyzing these trends, stakeholders can better understand the timing of these fluctuations and implement strategies to sustain higher ratings over longer durations. This longitudinal perspective ensures that the state remains a viable contender in the broader landscape of American ingenuity.
Discussion:
In January, the North Dakota inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the downward trend for the year. This is in contrast to the prior 12 months, which experienced an upward 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 Dakota office provides R&D tax credit consulting and advisory services to Fargo, Bismarck, Grand Forks, Minot, and West Fargo.
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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