August 2025: 1.30% (C+ grade)

Michigan inventionINDEX August 2025: 1.30% (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).

Michigan inventionINDEX Scores – Last 12 months

The Michigan inventionINDEX score for August 2025 stands at 1.30%, receiving a C+ rating. This marks a notable decrease from the previous month’s score of 2.01% and a B rating. While the score for August is consistent with the recent fluctuations seen throughout 2024 and 2025, it is a modest result when compared to some of the peak performances in the past. The current score indicates a period of average inventive activity, which aligns with the state’s historical pattern of varying performance.

A review of the historical data reveals periods of significant innovative activity. The highest recorded scores occurred in October 2024, September 2023, and August 2023, all of which received an impressive A+ rating with scores near or above 3%. These high scores underscore the state’s capacity for major breakthroughs. When the inventionINDEX is high, it suggests a robust climate for intellectual property creation, which can lead to positive outcomes such as increased investment, job growth, and enhanced economic competitiveness. A strong score is often a bellwether for a thriving innovation ecosystem, signaling a conducive environment for both established companies and emerging startups.

Conversely, the data also shows periods of lower performance, such as the D-rated score of 0.80% in March 2025 and the F-rated score of -0.11% in July 2023. A low inventionINDEX score indicates a potential slowdown in the rate of innovation. This could be a reflection of various factors, including a decrease in patent filings, a reduction in research and development spending, or broader economic headwinds. Such lower scores carry negative implications, as a lack of new intellectual property can hinder long-term economic growth and a state’s ability to attract and retain top talent. It can also suggest a weakening of the region’s overall technological and creative competitiveness.

In conclusion, the inventionINDEX for the past 60 months demonstrates a cyclical and dynamic pattern of innovation in the state. While the current score for August 2025 is a step back from the highs of July, it is important to view it within the context of the historical table, which shows that the state has a consistent track record of both strong and weak performances. The fluctuations highlight the need for sustained efforts to foster an environment of continuous innovation to ensure positive economic outcomes and avoid the negative implications associated with a prolonged period of lower scores.

Discussion:

In August, the Michigan inventionINDEX scored a positive 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 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 Michigan office provides R&D tax credit consulting and advisory services to Detroit, Grand Rapids, Warren, Sterling Heights, Ann Arbor, Lansing, Flint, Dearborn, Livonia, Troy, Westland, Farmington Hills, Kalamazoo, Wyoming, Rochester Hills, Southfield, Taylor, Pontiac, St Clair Shores and Royal Oak.

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. 

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