March 2026: 1.15% (A- grade)

Pennsylvania inventionINDEX March 2026: 1.15% (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).

Pennsylvania inventionINDEX Scores – Last 12 months

The March 2026 Pennsylvania inventionINDEX score of 1.15 percent reflects a steady climb in regional innovation capacity after a sluggish start to the year. Rising from a C+ rating of 1.04 percent in January and a B rating of 1.08 percent in February, the current A- grade suggests that the state’s creative sectors are regaining significant momentum. This upward shift indicates a successful reversal of the cooling trend observed during the transition from late 2025 into early 2026, positioning the Commonwealth on much more favorable footing as the second quarter of the year approaches.

Looking back across the sixty-month historical spectrum, the current score of 1.15 percent occupies a solid mid-to-high tier position within Pennsylvania’s performance range. While the state is currently performing significantly better than its historical low of 1.00 percent recorded in November 2024, it has yet to reclaim the exceptional peaks seen in late 2023, such as the 1.48 percent high reached in September of that year. The index has historically shown a high degree of sensitivity, where even minor fractional shifts can move the state between average and elite ratings, underscoring the delicate balance required to maintain a top-tier innovation environment over the long term.

A higher grade on the inventionINDEX serves as a critical indicator of economic health and future growth potential for Pennsylvania. When the state achieves A-range ratings, it signals to venture capitalists and industrial leaders that the region provides fertile ground for patent development and technological breakthroughs. These scores are often associated with increased research and development spending, a more aggressive expansion of the high-tech workforce, and a generally more robust pipeline of commercialized products. Such an environment fosters a culture of success that can attract national and international talent, reinforcing the state’s reputation as a hub for modern industry and scientific advancement.

Conversely, lower scores such as the C-tier ratings seen in late 2024 and the beginning of 2026 point toward potential risks in the regional ecosystem. A declining inventionINDEX suggests a period of diminished creative output or a lack of institutional support for emerging technologies, which can lead to a loss of competitive advantage relative to neighboring innovation hubs. These dips often result in a more cautious investment climate and may precede a migration of intellectual capital toward more active markets. Sustaining high scores is therefore necessary not just for immediate growth, but to protect the state against the long-term economic erosion that typically follows periods of sustained innovative stagnation.

Discussion:

In March, the Pennsylvania inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed 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. 

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.