South Dakota inventionINDEX August 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 South Dakota inventionINDEX Scores

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

The South Dakota inventionINDEX achieved a score of 1.17% in August 2026, marking the highest point across the entire 61-month historical dataset. Receiving an A+ rating, this result surpasses the multi-year average of approximately 1.05% and reflects a robust surge from previous months such as July and May 2026, which both recorded 1.09%. This performance highlights a strong upward trend entering late 2026, building upon consistent A-range scores established throughout the spring and early summer periods.

Historical comparisons demonstrate notable volatility over the past five years, contrasting the current peak with previous downturns. The dataset records its lowest level in February 2023 at 0.96% with a D- rating, alongside other lower periods such as October 2025 at 0.97% with a D rating and December 2021 at 0.98% with a D+ rating. The rebound from these periodic contractions to the current 1.17% benchmark underscores a resilient recovery and sustained growth in regional innovation metrics over time.

Sustaining a higher score and a top-tier grade like A+ brings several measurable economic advantages to the region. Elevated indices signal strong commercial research activity, robust patent filings, and a fertile environment for technology transfer and entrepreneurship. Higher ratings attract venture capital investment, encourage corporate expansion, and enhance local employment opportunities within high-value technical sectors, establishing South Dakota as a competitive hub for technological growth.

Conversely, a decline in the inventionINDEX score toward C or D territory presents significant operational and macroeconomic concerns. Lower scores reflect reduced inventive output, stalled research initiatives, and potential capital flight to more dynamic markets. Prolonged periods of depressed metrics can hinder talent retention, slow productivity growth, and diminish investor confidence, emphasizing the importance of maintaining supportive infrastructure and strategic funding for innovation programs.

Discussion:

In August, the South Dakota inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the upward trend for the year. This is in contrast 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 South Dakota office provides R&D tax credit consulting and advisory services to Sioux Falls, Rapid City, Aberdeen, Brookings and Watertown

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.