MINNESOTA INVENTIONINDEX | JANUARY 2026

January 2026: 1.43% (B- grade)

Minnesota inventionINDEX January 2026: 1.43% (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

The Minnesota inventionINDEX for January 2026 stands at 1.43%, resulting in a B- rating. This figure represents a notable decline from the 1.86% (A-) recorded in December 2025 and sits lower than the 1.79% (B+) observed exactly one year prior in January 2025. When compared to the start of 2024, which boasted a robust score of 2.32% and an A+ rating, the current data suggests a cooling period for the state’s innovation output. While the index remains within the B-tier, the downward trend at the beginning of the new year highlights a departure from the stronger performance levels seen during the latter half of 2025.

A broader examination of the historical table over the last sixty months reveals a high degree of volatility in the regional innovation ecosystem. The current January 2026 score of 1.43% is significantly higher than the five-year low of 0.91% recorded in April 2023, yet it remains well below the peak performance of 2.59% achieved in July 2025. Throughout the five-year period, the index has frequently oscillated between the A and B categories, with occasional regressions into the C range, such as the 1.03% seen in January 2022. This historical context indicates that while Minnesota possesses a resilient baseline for creative development, sustaining peak performance remains a challenge over the long term.

The positive outcomes of achieving higher grades, specifically those in the A and A+ range, are substantial for the state’s economic and scientific landscape. When the inventionINDEX exceeds the 2.00% threshold, it typically reflects an environment rich in patent filings, high levels of research and development investment, and a healthy pipeline of commercializable technologies. These elevated scores often serve as a signal to venture capitalists and industry leaders that the region is a prime location for investment and talent acquisition. A high rating suggests that the infrastructure for innovation is functioning efficiently, allowing new ideas to transition from the laboratory to the marketplace with greater speed and success.

In contrast, lower scores and ratings in the C range carry negative implications for Minnesota’s competitive standing. A dip in the index, such as the 1.18% seen in March 2025 or the 1.12% in December 2022, may signify a period of stagnation in intellectual property production or a reduction in the resources available to local inventors. Sustained lower scores can lead to a loss of momentum, potentially causing high-skilled talent to migrate toward more active innovation hubs in other regions. As the index settles at 1.43% for the start of 2026, it serves as a reminder that consistent support for the entrepreneurial and scientific communities is necessary to prevent further erosion of the state’s innovative capacity.

Discussion:

In January, 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 similar 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 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.