Virginia inventionINDEX August 2026: 1.84% (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 Virginia inventionINDEX reached 1.84 percent in August 2026, earning an A+ rating and continuing a sustained period of high performance relative to historical benchmarks. Across the evaluated 60-month timeframe, the index holds an overall mean of approximately 1.80 percent, placing the most recent performance above the multi-year baseline. This current output reflects a structural shift from the index’s earlier historical period in late 2021 and early 2022, when scores regularly dipped into the 1.20 to 1.50 percent range, including a period low of 1.29 percent in December 2021. The steady rise in scores through subsequent years demonstrates a maturing innovation landscape that has successfully raised both its floor and its expected standard performance.

An examination of the historical trend highlights a distinct transition toward sustained excellence starting in mid-2023. While 2021 and 2022 recorded several lower ratings, including B and A- grades, the period from 2023 through August 2026 is dominated by top-tier A+ ratings, which account for 50 of the 61 total monthly observations. Peak scores reached as high as 2.18 percent in October 2023, followed closely by 2.17 percent in March 2026 and 2.16 percent in July 2025. Although minor monthly fluctuations occur between 1.60 and 2.17 percent, the index consistently maintains an average near 1.86 percent in 2026, proving that top-level inventive output has become the established norm rather than an anomaly.

Sustaining a high score and an A+ rating delivers significant economic and strategic benefits to the region. A top-tier inventionINDEX score signals vibrant intellectual property creation, robust research and development activity, and a thriving ecosystem for technology commercialization. These strong metrics attract venture capital investments, encourage enterprise expansion, and help draw elite research talent to local universities and laboratories. Furthermore, elevated innovation scores foster job growth in advanced industries and enhance the broader reputation of the state as a leading hub for technological progress and commercial enterprise.

Conversely, a decline in the inventionINDEX score toward lower historical levels carries notable risks for long-term growth. When scores drop into lower tiers, such as the 1.29 percent mark seen in late 2021, it often indicates slowing patent filings, reduced funding for early-stage development, or broader economic headwinds in key technology sectors. A lingering lower grade can deter institutional investors, leading to capital flight toward more dynamic competing markets. Additionally, persistent underperformance risks weakening the regional innovation pipeline, potentially leaving local businesses behind as technological advancements accelerate elsewhere.

Discussion:

In August, 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.