MICHIGAN INVENTIONINDEX | MAY 2025
May 2025: 1.33% (C+ grade)
Michigan inventionINDEX May 2025: 1.33% (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 12 months, the Michigan inventionINDEX has demonstrated a pattern of moderate fluctuations, with May 2025 marking a score of 1.33%. This represents a modest improvement over April’s 1.68%, signaling a small contraction in innovation activity month-over-month. However, the current figure remains higher than many of the months in late 2024 and early 2025, including March (0.80%), February (1.20%), and January (1.01%). The general trend indicates a gradual rebound from the volatility seen last fall, particularly October 2024’s peak at 2.97%, which appears to have been an outlier driven by concentrated innovation activity.
A higher inventionINDEX score is generally a favorable signal, as it reflects increased patent filings, innovative disclosures, or other measurable intellectual property outputs. This can translate into greater commercial potential for local industries, elevated investor interest, and broader national recognition of Michigan as a hub for technology and applied research. Periods such as July 2024 (1.93%) and December 2024 (1.47%) likely contributed to a positive perception of the state’s innovation climate, possibly spurring new research partnerships and talent recruitment.
Conversely, lower scores—like those recorded in August 2024 (0.70%) and March 2025 (0.80%)—can suggest a slowdown in inventive activity. While this may be seasonal or cyclical in nature, extended periods of low scores may raise concerns about reduced R&D funding, declining patent application rates, or shifting priorities within academic and industrial sectors. If not addressed, such downturns could limit Michigan’s ability to remain competitive in high-tech and manufacturing sectors where innovation is a critical differentiator.
Overall, while May 2025’s score does not reach the heights seen in October 2024 or even July 2024, it does reflect a relatively healthy level of inventive activity. The trajectory over the past year reveals a resilient innovation landscape, capable of rebounding after brief periods of stagnation. Stakeholders should view these scores not only as snapshots of current conditions, but as indicators of how well the state is fostering a sustainable environment for innovation and long-term economic vitality.
Discussion:
In May, the Michigan inventionINDEX scored a positive sentiment which was lower than the previous year’s average but outperformed 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 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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