Texas inventionINDEX August 2026: 1.14% (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.

In August 2026, the Texas inventionINDEX registered a score of 1.14% with a B rating, marking a minor step down from July’s 1.15% and a noticeable pullback from June’s robust 1.21% A- performance. Comparing this result across the broader 2026 timeframe reveals a pattern of moderate oscillation, sitting below the calendar-year peak of 1.25% achieved in March 2026 but comfortably ahead of the year-to-date low of 1.11% recorded in April 2026. This recent output demonstrates that while short-term momentum has cooled slightly entering late summer, the state continues to maintain a stable, middle-tier innovation baseline relative to earlier months in the year.

Placing the August 2026 score into a longer 60-month historical context illustrates how the index has evolved through distinct phases of expansion and consolidation. The current 1.14% figure resides well below the historical high-water marks seen in prior years, such as the peak of 1.48% recorded in August 2023, 1.45% in August 2022, and 1.43% in November 2022. However, the latest rating remains well above the 60-month floor of 1.04% C rating from October 2021 and the 1.06% C+ ratings observed in April and July 2023. Over the five-year spectrum, Texas has consistently avoided falling into negative sentiment territory, keeping its multi-year trajectory aligned within the solid B to A- range.

Achieving higher inventionINDEX scores, particularly grades in the A- to A+ range like those seen in late 2022 and late 2023, yields significant economic and structural benefits for the state. Stronger ratings signal that patent output is outstripping broader GDP expansion, indicating an accelerated rate of commercial research and technological advancement. These high-performing periods bolster investor confidence, draw increased venture capital into research facilities, and attract top-tier scientific talent to regional innovation hubs. Furthermore, elevated index levels typically reflect effective collaboration between academic institutions, enterprise laboratories, and government tax incentives.

Conversely, a lower score or a persistent downward shift toward C grades introduces notable challenges for the state’s long-term competitive standing. Softer scores suggest a potential slowdown in intellectual property generation, bottlenecked patent processing, or reduced corporate research budget allocations relative to overall economic growth. When the index lingers at lower tiers, it can signal to stakeholders that local industries are struggling to translate capital expenditures into marketable inventions. Left unaddressed, prolonged periods of depressed innovation scores risk stalling high-value job creation in STEM sectors and weakening the broader economic resilience of the region.

Discussion:

In August, the Texas 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 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.

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