Virginia inventionINDEX July 2026: 1.83% (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 Virginia inventionINDEX Scores

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

The July 2026 Virginia inventionINDEX score of 1.83 percent, yielding a top-tier A+ rating, demonstrates a healthy and sustained trajectory when evaluated against historical performance over the recorded 60-month horizon. This recent score exceeds the multi-year average of approximately 1.80 percent, reflecting consistent momentum in regional innovation output relative to Gross Domestic Product growth. While the July metric represents a modest consolidation from the peak of 2.17 percent recorded in March 2026 and June’s 1.98 percent, it remains well above earlier historical baselines. Over the five-year timeline, the index reached its all-time peak of 2.18 percent in October 2023, while registering a multi-year low of 1.29 percent with a B rating in December 2021. The long-term trend highlights a clear evolution from early volatility in 2021 and 2022, when scores regularly dipped into the 1.40 to 1.50 percent range, toward a mature phase dominated by high-grade stability.

Achieving and maintaining a higher inventionINDEX score along with an A+ rating delivers substantial advantages to Virginia’s economic and commercial landscape. High scores signal that regional patent production is growing at a faster rate than broader economic expansion, serving as a reliable indicator of a dynamic research ecosystem. This elevated output boosts corporate and institutional confidence, attracting venture capital, corporate investment, and top-tier research talent seeking fertile ground for technological development. Furthermore, strong scores reflect robust participation in state and federal R&D tax credit programs, encouraging ongoing private sector investment in proprietary technology, advanced manufacturing, and commercial intellectual property.

Conversely, a lower inventionINDEX score or a downgraded rating brings notable economic and strategic risks. Dips into lower tiers, such as the 1.29 percent B rating observed in late 2021 or the 1.42 percent A- rating in December 2022, point toward potential bottlenecks in commercial research output relative to macroeconomic expansion. A sustained decline suggests that patent filings are failing to keep pace with economic growth, exposing a potential reliance on non-technical or financial sectors rather than true innovation. Over time, diminished scores can erode investor sentiment, weaken the competitiveness of local technology clusters, and signal underutilization of incentive frameworks that drive long-term productivity.

Ultimately, the 60-month historical dataset illustrates that Virginia’s innovation economy has transitioned from early post-pandemic recalibration into an extraordinarily resilient, top-performing framework. With 49 out of 61 recorded months achieving an A+ rating, the baseline for regional patent output remains exceptionally robust. By continuing to leverage research incentives and fostering collaborative commercial development, Virginia is well-positioned to maintain its high-grade performance, avoid the troughs of previous years, and preserve its status as a regional leader in intellectual property generation.

Discussion:

In July, the Virginia 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 an 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 Virginia office provides R&D tax credit consulting and advisory services to Virginia Beach, Norfolk, Chesapeake, Richmond, Newport News, Alexandria, Hampton, Roanoke, Portsmouth and Suffolk

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.