August 2025: 1.55% (B grade)

Minnesota inventionINDEX August 2025: 1.55% (B 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).

Minnesota inventionINDEX Scores – Last 12 months

Based on the provided historical table, an analysis of the Minnesota inventionINDEX reveals a dynamic and often volatile trend over the last sixty months. The most recent score in August 2025, at 1.55% with a B rating, represents a noticeable decline from the previous month’s high-performing A+ score of 2.59%. This shift suggests a degree of month-to-month variability in the state’s innovation output, a characteristic that is common in such economic indicators. The August 2025 score positions Minnesota in a solid, but not exceptional, tier of inventive activity, maintaining a positive sentiment but with room for improvement.

A review of the full historical data shows that the August 2025 score is a return to a more typical performance range, rather than a significant outlier. The period has seen scores fluctuate dramatically, with notable peaks reaching A+ ratings at 2.36% in September 2020 and 2.33% in August 2023, demonstrating a history of strong inventive output. Conversely, the index has experienced lower periods, such as the C- rating of 0.91% in April 2023 and the C ratings in March 2023 and July 2022. This broad range highlights the cyclical nature of innovation and the external factors that can influence an economy’s ability to produce new patents and ideas.

A higher inventionINDEX score and a corresponding top rating, such as an A or A+, carries significant positive implications for a state’s economic landscape. It signals a thriving environment for new ideas and technological advancements. This strong performance can attract venture capital and external investment, as it indicates a fertile ground for innovation and growth. A high score also reflects a supportive ecosystem, which can include robust research institutions, a talented workforce, and effective policies that foster an inventive culture. This positions the state as a leader in innovation and a desirable location for businesses and skilled professionals.

Conversely, a lower inventionINDEX score can suggest potential challenges within the innovation ecosystem. A score below the C grade, for instance, may indicate a slowdown in the pace of new inventions or a less competitive environment for attracting and retaining talent. A sustained downward trend could lead to a loss of competitive advantage and a “brain drain” of innovators seeking more robust environments elsewhere. The index serves as a valuable barometer, and a lower reading suggests areas that may require strategic attention to reignite inventive output and ensure long-term economic vitality.

Discussion:

In August, the Minnesota inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is in contrast 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 Minnesota office provides R&D tax credit consulting and advisory services to Minneapolis, Saint Paul, Rochester, Duluth, Bloomington, Brooklyn Park, Plymouth, Maple Grove, Woodbury, and St Cloud.

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.