North Dakota inventionINDEX August 2026: 1.10% (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 Dakota inventionINDEX Scores

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

The North Dakota inventionINDEX demonstrated remarkable resilience and cyclical strength over the 60-month period from August 2021 through August 2026, culminating in a strong August 2026 score of 1.10% with an A+ rating. This latest figure represents a notable rebound from the July 2026 score of 1.02% (C+ rating) and continues a broader trend of high-performing cycles seen throughout recent years. Over the observed five-year span, the index reached impressive peaks of 1.23% (A+) in both August 2023 and September 2025, alongside strong performances such as 1.19% (A+) in March 2026 and May 2025. Conversely, the historical dataset reveals periodic contractions, reaching a multi-year low of 0.96% (D rating) in October 2022 and repeated baseline dips around 1.00% to 1.02% (C to C+ ratings). Despite these temporary slowdowns, North Dakota has consistently returned to top-tier status, demonstrating that its state innovation apparatus maintains strong structural foundations.

Achieving higher scores and superior letter grades like A and A+ yields substantial economic and strategic benefits for North Dakota. High inventionINDEX values signify that the state’s commercial patent production is significantly outpacing long-term baseline growth models relative to its economic expansion. This surplus in intellectual property generation signals a thriving research and development ecosystem, robust corporate investment, and highly effective state-level R&D tax incentives. For business executives, institutional investors, and technology leaders, higher scores serve as a compelling indicator of regional technological capability, attracting venture capital and encouraging further talent recruitment. Furthermore, strong patent activity helps ensure that state Gross Domestic Product growth is grounded in proprietary technological advancements and genuine hard-science innovation rather than speculative economic expansion.

Conversely, lower scores and downgraded ratings such as C, C+, or D carry serious negative implications for the state’s economic trajectory. A depressed inventionINDEX score indicates that patent output is falling behind projected growth baselines, signaling potential stagnation in original commercial research and technological intellectual property creation. When low scores persist, it raises warning flags regarding hollow growth, a condition where top-line economic activity continues to expand while the underlying technological and IP foundation contracts. If score deficiencies persist below baseline standards over extended periods, warning mechanisms highlight structural vulnerabilities that can erode North Dakota’s competitive edge. A sustained drop in patent activity can also signal underutilized tax incentives, diminished corporate R&D funding, or a loss of key technical talent to neighboring jurisdictions.

Looking across the complete 60-month historical trajectory, North Dakota’s overall innovation footprint remains healthily expansive despite expected short-term volatility. The state’s ability to repeatedly bounce back from lower rating periods—such as transitioning from 1.02% in July 2026 to 1.10% in August 2026—highlights a responsive and adaptive economic climate. Moving forward, maintaining a position in the upper tiers will require continuous alignment between private enterprise R&D, state policy incentives, and academic research partnerships. By continuously tracking these metrics, policymakers and corporate decision-makers can proactively adjust innovation strategies, ensuring that North Dakota preserves its strong position within the broader national landscape of technological development and intellectual property creation.

Discussion:

In August, the North Dakota inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is in contrast to the prior 12 months, which experienced a slight 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.

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.