Vermont inventionINDEX July 2026: 1.00% (C- 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 Vermont inventionINDEX Scores

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

The July 2026 Vermont inventionINDEX score stands at 1.00% with a C- rating, reflecting a substantial decline compared to historical benchmark periods. When evaluated against the entire 60-month dataset, which maintains an overall average score of 1.52%, the current metric indicates a clear cooling period in regional inventive activity. This score matches the lowest readings recorded over the past year, tying with October 2025 and February 2026, and sits far below the historic high of 3.00% achieved in February 2023. While the score remains above the all-time dataset low of 0.60% recorded in September 2022, the recent concentration of lower ratings underscores a sustained departure from the high-performing tiers seen in earlier years.

A broader multi-year trajectory reveals a pronounced multi-phase trend across the historical data. During 2023, the index experienced its strongest momentum, averaging 2.21% and frequently yielding top-tier A+ ratings. The annual average moderated to 1.61% in 2024 and further dipped to 1.45% in 2025, culminating in a year-to-date average of 1.12% through July 2026. A direct comparison between the most recent 12-month window from August 2025 through July 2026, which averaged 1.21%, and the preceding 12-month period from August 2024 through July 2025, which averaged 1.52%, highlights a clear deceleration in innovation output across the state.

Securing higher grades and elevated index scores carries significant economic and strategic benefits for the region. Strong performances, particularly those achieving A+ ratings with scores reaching or exceeding 2.00%, signal a flourishing innovation ecosystem characterized by vigorous patent activity, active research commercialization, and strong entrepreneurial engagement. High index scores enhance confidence among venture capitalists, institutional investors, and corporate partners, making it easier to attract capital, recruit top-tier scientific talent, and establish high-growth technology ventures that drive sustainable long-term economic expansion.

Conversely, declining scores and lower ratings present notable challenges for the regional economic trajectory. Sustained low metrics, such as the C- rating seen in July 2026, indicate potential bottlenecks in research and development funding, reduced intellectual property creation, or macroeconomic headwinds affecting local businesses. Prolonged periods of diminished inventive output risk weakening competitive positioning, slowing job growth in high-value technical sectors, and encouraging talent migration to more dynamic innovation hubs, emphasizing the need for targeted policies to revitalize regional inventive capacity.

Discussion:

In July, the Vermont inventionINDEX scored a negative sentiment which was lower than the previous year’s average and underperformed 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 Vermont office provides R&D tax credit consulting and advisory services to Burlington, South Burlington, Rutland, Barre and Montpelier

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.