KENTUCKY INVENTIONINDEX | NOVEMBER 2025

November 2025: 0.84% (D- grade)

Kentucky inventionINDEX November 2025: 0.84% (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).

Kentucky inventionINDEX Scores – Last 12 months

The Kentucky inventionINDEX score for November 2025 stands at 0.84%, resulting in a D- rating. This score represents a cooling-off period for innovation, following 0.86% in October 2025 and 0.96% in September 2025. This recent performance places the current score well below the key 1.00% threshold, a benchmark it successfully reached in April 2025. The sub-average nature of the score is further underscored when compared to the rolling average of the last twelve months, which was approximately 0.94%. This recent trend of lower scores suggests the state’s innovation ecosystem is currently facing headwinds, necessitating a closer examination of the underlying factors influencing the capacity for invention and commercialization.

Examining the full sixty-month historical table reveals a marked contrast between the current performance and past highs. The overall average score for the period sits around 0.98%, indicating that the November 2025 score is 0.14 percentage points below the long-term baseline. The index has reached impressive peaks, most notably 1.26% in August 2021 (an A- rating) and 1.21% in December 2020 (a B+ rating), demonstrating the state’s robust potential for high-level inventive output. However, the period also includes a low point of 0.82% in April 2023 (an F rating). The proximity of the current score to this historical nadir signals a broader trend of inconsistent or declining momentum in the innovation sphere over the past few years, highlighting a struggle to sustain top-tier performance.

A consistently higher inventionINDEX score, particularly one rated C or above (historically represented by scores of 1.00% and higher), is a powerful indicator of a dynamic and robust economic future. A high score signifies a flourishing environment where investment in research and development is yielding substantial, measurable results. Positive outcomes include an increase in high-wage, knowledge-based jobs, greater capital investment, and the successful development of intellectual property that can drive exports and economic diversification. Furthermore, a high grade enhances the state’s reputation, making it an attractive hub for talented entrepreneurs and researchers, thereby creating a virtuous cycle of sustained innovation and economic vitality.

Conversely, a protracted period of lower scores, such as the recent D- rating, presents significant negative implications for the state’s competitive standing. A score consistently below the long-term average may signal stagnation in key innovation sectors, a weakening link between research institutions and the commercial market, or a reduction in the rate at which new ideas are being translated into viable businesses. These challenges can lead to decreased external investment, as capital tends to flow toward regions with proven innovative strength. To mitigate the risk of long-term economic deceleration and to ensure Kentucky remains competitive, a lower score necessitates immediate, strategic intervention to revitalize the innovation pipeline and address structural barriers to inventive success.

Discussion:

In November, 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.