KENTUCKY INVENTIONINDEX | MAY 2025

May 2025: 0.88% (D grade)

Kentucky inventionINDEX May 2025: 0.88% (D 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).

The latest inventionINDEX Score for Kentucky in May 2025 stands at 0.88%, reflecting a slight drop from the April 2025 figure of 1.00%. This marginal decline comes after a steady upward trend that began in February 2025, when the score climbed from 0.87% in March to 0.98%. Although the May score shows a minor pullback, it remains within the broader average range observed over the past year, indicating a relatively stable environment for invention activity in the state.

When reviewing the 12-month trajectory, Kentucky’s inventionINDEX has generally hovered near the 1.00% benchmark, peaking at 1.06% in July 2024. This historical context suggests that while May 2025 is slightly underperforming, it is not an outlier compared to similar months such as August 2024 (0.87%) and March 2025 (0.87%). The presence of consistent scoring near the 1% mark points to an ecosystem that, while occasionally fluctuating, maintains a baseline level of inventive output and intellectual property activity.

A higher inventionINDEX Score generally signals an uptick in patent filings, innovation output, and research-driven economic development. This is beneficial for the state’s broader economic health, as it can attract R&D investments, strengthen partnerships between academia and industry, and promote job creation in high-skill sectors. Strong invention metrics also enhance Kentucky’s reputation nationally and globally, encouraging entrepreneurs and corporations to consider the state as a hub for innovation.

Conversely, a lower score may reflect a temporary slowdown in inventive activity, potentially caused by funding gaps, regulatory barriers, or limited research momentum. If such dips persist, they could impact the state’s competitiveness and reduce its visibility in national innovation rankings. Additionally, lower inventionINDEX Scores might signal a need for policy intervention or strategic investment in university research, tech incubators, or workforce development to reinvigorate the innovation pipeline. Continuous monitoring is essential to ensure that any downturns are addressed promptly to sustain long-term growth.

Discussion:

In May, the Kentucky 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 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 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.