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).

Pennsylvania inventionINDEX Scores – Last 12 months

The February 2026 inventionINDEX score for Pennsylvania stands at 1.08 percent, which represents a modest but notable recovery from the 1.04 percent recorded in January. This shift moved the state’s rating from a C plus to a B, indicating a stabilization in innovation activity as the first quarter of the year progresses. While this score is an improvement over the previous month, it remains slightly below the 1.11 percent observed exactly one year ago in February 2025. This suggests that while the state is trending upward in the short term, it has yet to return to the higher levels of output seen during the same period in the prior year.

When viewing these results through a broader historical lens, the current score of 1.08 percent highlights a period of moderate performance within the sixty-month dataset. Pennsylvania has experienced significant volatility over the last five years, reaching a peak of 1.48 percent in September 2023 and dipping to a low of 1.00 percent in November 2024. The current standing signifies a middle-ground position that avoids the depths of late 2024 but falls short of the robust innovation surges that characterized much of 2023. This historical context suggests that the state is currently in a phase of steady, if cautious, growth as it works to reclaim its higher historical ratings.

A higher grade on the inventionINDEX brings a variety of positive outcomes for the Pennsylvania economic landscape. Higher scores, such as the A plus ratings seen in mid-2025 and late 2023, typically correlate with increased patent activity, higher levels of research and development investment, and a more competitive environment for technology startups. These periods of high performance signal to national and international investors that Pennsylvania is a hub for ingenuity, which can lead to job creation and long-term economic resilience. A strong rating acts as a catalyst for further growth, creating a cycle where success attracts the talent and capital necessary to sustain high levels of invention.

Conversely, lower scores and grades present several negative implications that require careful attention. When the index falls toward the 1.00 percent mark or drops into the C range, it often reflects a stagnation in the local innovation pipeline or a loss of momentum compared to other regions. Such a decline can result in reduced venture capital interest and a potential exodus of talent as top researchers and entrepreneurs seek more active ecosystems. Lower ratings serve as a warning sign that current policies or economic conditions may be hindering the state’s creative output, necessitating a strategic review to prevent a sustained period of underperformance that could erode the state’s competitive edge in the global market.

Discussion:

In February, the Pennsylvania 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 Pennsylvania office provides R&D tax credit consulting and advisory services to Philadelphia, Pittsburgh, Allentown, Erie, Reading, Scranton, Bethlehem, Lancaster, Harrisburg, Altoona, York, State College, Wilkes Barre, Chester, Williamsport, Easton, Lebanon, Hazleton, New Castle and Johnstown.

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. 

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