Pennsylvania inventionINDEX August 2026: 1.07% (B- 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 stood at 1.07% in August 2026, earning a B- rating and reflecting a modest rebound from July’s score of 1.05% (C+). While this uptick indicates short-term stabilization after a mid-summer dip, the current metric remains below the peak performance observed in June 2026, when the score reached 1.17% with an A rating. Across the broader historical dataset spanning 61 months, the August 2026 figure sits beneath the historical average of approximately 1.13%, positioning current innovation output toward the lower-middle tier of long-term state performance.

Looking back across the five-year spectrum, the index displays notable multi-year fluctuations, ranging from a peak of 1.48% (A+) in September 2023 to a floor of 1.00% (C) in November 2024. Year-over-year comparative data reveals that August 2026 aligns closely with August 2024 (1.05%, B-), yet trails significantly behind August 2025 (1.12%, B+), August 2023 (1.31%, A+), and August 2022 (1.23%, A+). Although the state achieved 13 top-tier A+ ratings throughout this timeframe, recent quarters reflect a shift toward moderate B and C ranges, underscoring a period of tempered commercial and technological activity relative to earlier high points.

Sustaining higher grades, such as the A and A+ ratings achieved in prior cycles, yields significant economic and strategic benefits for the commonwealth. Stronger scores signify a flourishing intellectual property ecosystem characterized by robust patent applications, expanded research and development expenditures, and heightened commercialization efforts. High ratings act as a beacon for institutional venture capital, encouraging private equity firms and enterprise partners to fund local technology startups. Furthermore, top-tier performance enhances regional competitiveness, drives high-skilled job growth, and reinforces Pennsylvania’s stature as a premier innovation hub.

Conversely, persistent lower scores and reduced letter grades carry noticeable risks for the regional economy. When the index dips into the C or low-B tiers, it suggests potential friction in the translation of research into commercial patents, reduced institutional funding, or broader macroeconomic headwinds affecting regional inventors. Extended periods of lower ratings can dampen investor confidence, slow down commercial spinoff activity, and prompt emerging tech talent or venture capital to migrate toward more active markets. Reversing these lower figures requires targeted investments in research infrastructure, expanded founder resources, and policy incentives that invigorate statewide inventorship.

Discussion:

In August, 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 in contrast to the prior 12 months, which experienced an 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.

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