June 2026: 1.17% (A grade)

Pennsylvania inventionINDEX June 2026: 1.17% (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 Pennsylvania inventionINDEX Scores

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

The Pennsylvania inventionINDEX has demonstrated substantial resilience and volatility over the past sixty months, culminating in a robust score of 1.17 percent and an ‘A’ rating in June 2026. This recent figure represents a notable recovery from the fluctuations observed earlier in the year, such as the drop to 1.01 percent with a ‘C’ rating in April 2026 and 1.04 percent in January 2026. When compared against the long-term historical baseline, the June 2026 score sits comfortably above the five-year average of approximately 1.13 percent. This upward trajectory highlights a revitalized momentum within the state’s innovation sector, showing an encouraging departure from previous cyclical downturns, including the five-year historical low of 1.00 percent recorded in November 2024.

A deeper retrospective analysis reveals that while the current index of 1.17 percent reflects healthy economic performance, it still operates beneath the historical zenith established in late 2023. Specifically, the index achieved its absolute peak in September 2023 at 1.48 percent, supported by a string of high-performing months including August 2023 at 1.31 percent and October 2023 at 1.24 percent, all securing ‘A+’ ratings. The subsequent years witnessed a gradual decompression of these high values, with the index stabilizing into a more sustainable range before climbing again in mid-2026. This extensive historical context illustrates that while the current climate is strong, there remains untapped potential to match the record-setting productivity levels observed three years prior.

Achieving a higher grade and elevated score on the inventionINDEX yields numerous positive economic and structural outcomes for the commonwealth. An elevated rating, such as the ‘A’ or ‘A+’ grades seen in peak periods, signals a thriving entrepreneurial ecosystem characterized by robust intellectual property generation and efficient commercialization pathways. This performance enhances regional prestige, acting as a powerful magnet for venture capital, corporate partnerships, and high-tech manufacturing investments. Furthermore, an elevated index correlates with increased research and development collaboration between top-tier universities and private enterprises, which ultimately drives job creation, talent retention, and long-term economic prosperity across Pennsylvania.

Conversely, the negative implications of a lower score and depressed grade present significant challenges for the state’s economic competitiveness. When the index contracts toward the ‘C’ or ‘C+’ range, as seen during the lows of late 2024 and early 2026, it indicates potential bottlenecks in innovation pipelines, reduced funding availability, or a slowdown in patent filings. A sustained low score risks signaling to external stakeholders that the state may be losing its competitive edge to more technologically aggressive regions. This decline can discourage capital allocation from prospective investors, stifle startup growth, and cause a migration of specialized technical talent away from the commonwealth, thereby slowing down overall industrial modernization.

Discussion:

In June, 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 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 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.