KENTUCKY INVENTIONINDEX | APRIL 2025

April 2025: 1.00% (C- grade)

Kentucky inventionINDEX April 2025: 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).

Over the past six months, the Kentucky inventionINDEX Score has shown a fluctuating trend, reaching its peak at 1.06% in July 2024 and dipping to a low of 0.87% in March 2025. This pattern suggests that while innovation activity is steady, it experiences natural cycles of growth and decline. The score reached 1.00% in April 2025, maintaining a strong position compared to previous months. This increase from March, where the score was 0.87%, highlights a positive resurgence in the state’s innovative efforts.

A higher score, such as the 1.06% achieved in July 2024, signifies stronger performance in key areas like research, development, and intellectual property. This positive outcome can attract investment, improve Kentucky’s reputation as a hub for innovation, and lead to increased job opportunities. It can also lead to better partnerships with universities and businesses, fostering economic growth.

Conversely, a lower score, as seen in March 2025 with a score of 0.87%, may indicate potential stagnation or reduced activity in these areas. The decline can have negative implications, such as fewer innovation-driven investments, weaker economic growth, and diminished global competitiveness. If sustained, a lower score may also discourage talent retention and hinder future advancements in key industries.

In conclusion, while the fluctuation in Kentucky’s inventionINDEX Score reflects both progress and challenges, consistent high scores are vital to driving long-term innovation. Monitoring these scores provides insight into the state’s innovation landscape, highlighting both opportunities and areas requiring improvement.

Discussion:

In April, the Kentucky inventionINDEX scored a negative 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 Kentucky office provides R&D tax credit consulting and advisory services to Louisville, Lexington, Bowling Green, Owensboro, Covington, Richmond, Georgetown, Florence, Hopkinsville, and Elizabethtown.

Feel free to book a quick teleconference with one of R&D tax specialists at a time that is convenient for you, 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.