Texas inventionINDEX September 2026: 1.18% (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 registered at 1.18% with a B+ rating in September 2026, marking a constructive upward shift from the preceding months of August (1.14%, B) and July (1.15%, B). This recent uptick brings performance back toward the broader historical 60-month benchmark average of 1.20%, recovering from a subtle mid-year contraction seen in April 2026 when the index dipped to 1.11% (B-). While the current score remains below the 2026 high water mark of 1.25% (A) achieved in March, September demonstrates renewed operational momentum across the state’s innovation pipeline. Comparing the 2026 year-to-date average of 1.16% against previous years shows that while total invention activity has moderated slightly, short-term resilience remains intact.

A broader historical perspective across the entire 60-month dataset highlights a shift from high-volatility peak periods to a more standardized mid-range steady state. The index achieved its all-time peak in August 2023 at an impressive 1.48% (A+), accompanied by several strong performances throughout late 2022 and 2023, including November 2022 at 1.43% (A+) and March 2023 at 1.34% (A+). Conversely, periodic pullbacks pushed the index down to historical lows such as October 2021 at 1.04% (C) and mid-2023 at 1.06% (C+). Compared to those historical extremes, recent scores reflect a narrower trading band centered between B- and A- ratings, indicating that the ecosystem has stabilized despite falling short of the peak expansion volumes recorded three years prior.

Attaining higher inventionINDEX scores, particularly in the A- to A+ range, delivers substantial strategic and economic dividends for the Texas business environment. Elevated ratings signal robust commercial research output, accelerated patent application filings, and a highly active ecosystem for technological translation. High scores serve as a strong beacon for private equity and venture capital firms, driving equity investments into emerging industries such as energy transition, semiconductor design, and biomedical devices. Furthermore, superior invention metrics enhance university research funding opportunities, attract premier global engineering talent, and bolster the competitive moat of regional enterprise hubs.

Conversely, sustained declines or lower scores within the C to B- range carry notable negative implications for long-term economic competitiveness. Dips in the index often point to systemic bottlenecks, such as reduced corporate research spending, delayed intellectual property disclosures, or macroeconomic uncertainty that causes capital providers to pull back. A persistent low score risks triggering talent outward migration to rival innovation corridors and can stall product commercialization timelines across critical sectors. Addressing these lower performance bands requires targeted capital allocation, proactive state R&D tax incentives, and reinforced industry-academic partnerships to revitalize patent activity and elevate future scores.

Discussion:

In September, the Texas inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is similar 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 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.