Texas inventionINDEX July 2026: 1.15% (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 Texas inventionINDEX Scores

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

The Texas inventionINDEX recorded a score of 1.15% with a B rating for July 2026, marking a moderate retracement from June 2026 when the index reached 1.21% with an A- rating. This latest figure aligns closely with the performance observed throughout early 2026, matching the 1.15% scores recorded in February and May while staying above the April low of 1.11% (B-). Over the full dataset spanning 60 months back to July 2021, the historical mean score stands at approximately 1.21%. Consequently, the July 2026 score positions Texas slightly below its long-term benchmark, pointing toward a period of steady consolidation rather than aggressive expansion.

A broader evaluation of the five-year trajectory reveals a transition from sharp historical swings toward tighter metric stabilization. The index achieved its highest peak in August 2023 at 1.48% (A+), followed closely by August 2022 at 1.45% (A+) and November 2022 at 1.43% (A+). In contrast, the historical floor occurred in October 2021 at 1.04% (C), with secondary lows of 1.06% (C+) recorded in April and July 2023. Over the most recent twelve-month period, scores have oscillated within a narrower corridor between 1.11% and 1.27%. While top-tier A+ ratings occurred with high frequency between late 2021 and early 2024, recent quarters reflect a consistent baseline anchored in the B to A- range.

Reaching higher grades on the index yields major operational and strategic advantages for the state innovation climate. Strong scores in the A- to A+ tier serve as a compelling indicator of active research pipelines, efficient patenting mechanisms, and seamless collaboration between research universities and commercial enterprises. These elevated ratings build investor confidence, attracting increased venture capital flows and incentivizing major technology firms to expand local operations. Higher scores also accelerate technology transfer, enhance talent retention, and solidify the position of Texas as a leading market for scalable high-tech development.

On the other hand, sustained lower scores falling into the B- or C ratings present notable vulnerabilities for the regional innovation framework. Lower metrics reflect decelerated filing activity, venture funding hesitation, and administrative friction within the research commercialization funnel. When scores remain depressed, institutional investors may divert capital to competing technology hubs offering higher momentum and faster time-to-market dynamics. Furthermore, persistent lower grades can hinder top-tier talent acquisition, slow down municipal tech initiative investments, and undermine overall economic expansion in high-growth sectors.

Discussion:

In July, the Texas inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is similar 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 Texas office provides R&D tax credit consulting and advisory services to Houston, San Antonio, Dallas, Austin, Fort Worth, El Paso, Arlington, Corpus Christi, Plano, Laredo, Lubbock, Garland, Irving, Amarillo, Grand Prairie, Brownsville, McKinney, Frisco, Pasadena and Mesquite

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.