May 2026: 1.06% (A- grade)

North Dakota inventionINDEX May 2026: 1.06% (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).

North Dakota inventionINDEX Scores – Last 12 months

The North Dakota inventionINDEX recorded a score of 1.06% with an A- rating in May 2026, holding steady from the identical 1.06% score and A- rating observed in April 2026. While this consistency reflects a stable short-term environment, the current performance represents a slight moderation compared to the stronger metrics seen earlier in the year, such as the 1.19% (A+) in March 2026 and 1.10% (A+) in February 2026. When measured against the comprehensive 60-month historical baseline, May’s 1.06% rests just below the five-year average of 1.08%. This indicates that while the state’s innovation framework remains structurally sound and firmly positioned within the A-band, it is currently operating at a slightly more conservative pace than its long-term norm.

A broader look at the historical trajectory over the past five years demonstrates remarkable stability, with the annual averages hovering consistently around the 1.05% to 1.09% range. The index reached its absolute peak of 1.23% on two separate occasions, first in August 2023 and more recently in September 2025, both achieving an A+ rating. Conversely, the historical floor for the index occurred in October 2022, when it slipped to its only D rating at 0.96%. Outside of that isolated contraction, North Dakota has maintained an impressively tight distribution of scores, avoiding the volatile swings seen in other regions and demonstrating a reliable, steady-state ecosystem where the grade frequently rebounds into the top-tier brackets.

Achieving higher scores and premium grades, such as the A+ marks achieved repeatedly throughout 2024 and 2025, yields significant positive outcomes for North Dakota’s economic landscape. An elevated inventionINDEX signifies an accelerating momentum in local research, entrepreneurial activity, and commercialized technologies. These strong numbers enhance the state’s visibility, making it a highly attractive destination for out-of-state venture capital and corporate investment. Higher grades also indicate robust collaboration between localized industries, research institutions, and talent pools, creating a self-sustaining cycle that fosters high-paying jobs, retains specialized graduates, and drives long-term economic diversification.

On the other hand, a downward drift in scores or lower grade classifications introduces distinct negative implications for the state. When the index contracts toward the C or D thresholds, as it did during the late 2022 dip, it indicates underlying friction within the state’s innovation pipeline, such as capital constraints, regulatory hurdles, or a slowdown in patent filings. Prolonged periods of lower scores can dampen investor confidence, leading to reduced risk tolerance and slower funding rounds for early-stage startups. Furthermore, if the innovation environment remains sluggish, North Dakota risks losing its top technical and entrepreneurial talent to more aggressive regional markets, potentially stalling industrial modernization and limiting future growth.

Discussion:

In May, 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 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 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.

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.