MICHIGAN INVENTIONINDEX | SEPTEMBER 2025

September 2025: 1.33% (C+ grade)

Michigan inventionINDEX September 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).

Michigan inventionINDEX Scores – Last 12 months

The Michigan inventionINDEX for September 2025 stands at 1.33%, earning a C+ grade. This score shows a slight increase from August 2025’s 1.30% (C+), but a decrease from July 2025’s 2.01% (B). Comparing it to the previous year, September 2024 also registered a 1.26% (C) score, indicating a relatively stable performance around the C/C+ range in recent times, albeit with fluctuations. Over the last 12 months, the highest score was 2.97% (A+) in October 2024, and the lowest was 0.70% (D+) in August 2024, highlighting a range of innovation output within the past year.

A higher inventionINDEX score and a corresponding better grade signify robust innovation output, which typically correlates with positive economic sentiment. A strong performance suggests that the state’s GDP growth is effectively outpacing patent production growth, indicating a healthy environment for innovation and economic recovery. Such positive trends can attract investment, foster job creation, and generally improve the economic outlook, as businesses are more likely to thrive in an innovative ecosystem. This positive sentiment can be a crucial indicator for predicting economic resilience and growth, especially in the face of economic challenges.

Conversely, a lower inventionINDEX score and a poorer grade can have negative implications for economic sentiment. A score below the C grade, for instance, suggests that innovation output is not keeping pace with economic growth, potentially signaling underlying issues in the state’s innovation ecosystem. This could be due to various factors, such as reduced investment in research and development, a decline in patent applications, or broader economic contractions. Such a trend might deter potential investors and could indicate a more challenging path to economic recovery or sustained growth.

Observing trends over time, the Michigan inventionINDEX has experienced periods of both strong performance and notable dips. For example, the F grade in July 2023 with a -0.11% score represents a significant negative implication, suggesting a contraction in innovation output relative to GDP growth during that period. In contrast, the A+ grades in September 2023 and August 2023, with scores of 3.09% and 2.94% respectively, illustrate periods of exceptional innovation. These historical fluctuations underscore the dynamic nature of innovation and its direct link to economic health, providing valuable insights for understanding the state’s economic trajectory.

Discussion:

In September, 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. 

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.