MINNESOTA INVENTIONINDEX | MAY 2025
May 2025: 1.74% (B+ grade)
Minnesota inventionINDEX May 2025: 1.74% (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).
The May 2025 inventionINDEX score for Minnesota stands at 1.74%, reflecting a modest increase from the 1.18% recorded in March 2025. This upward trend suggests a rebound in innovation momentum following a mid-winter dip. While the current score is identical to April’s figure, it remains slightly below the January peak of 1.79% and the December 2024 high of 2.15%. Compared to the same month last year—May 2024, which posted a 1.57%—the current score signals incremental year-over-year improvement, indicating a slow but steady strengthening of the state’s inventive output.
A higher inventionINDEX score generally signals a more vibrant innovation ecosystem. For Minnesota, this could translate into increased R&D investment, heightened interest from venture capital firms, and stronger academic-industry partnerships. As the score nears or surpasses the 2% threshold—seen most recently in December 2024 and October 2024—it typically reflects a fertile environment for patent filings, technology transfer, and startup formation. Such conditions not only enhance the state’s national competitiveness but also create broader economic benefits, including job creation and regional diversification.
However, fluctuations below the 1.5% mark, such as those observed in March 2025 (1.18%), August 2024 (1.31%), and November 2024 (1.24%), can be indicators of cooling momentum in the innovation pipeline. Lower scores may reflect waning patent activity, reduced funding, or delays in commercialization. These dips can also undermine investor confidence and potentially deter talent attraction in key STEM fields. If sustained, suboptimal inventionINDEX levels may signal systemic challenges that could hinder the state’s ability to maintain leadership in high-tech sectors.
In context, Minnesota’s inventionINDEX appears to be on a moderate recovery path following the variability seen over the past year. While not yet back to the December 2024 peak, the consistent improvement since March 2025 suggests resilience and adaptability within the local innovation community. If the current trajectory holds or accelerates, Minnesota may be well-positioned to re-establish a more robust innovation profile by the second half of 2025. Monitoring the next quarter’s performance will be crucial in determining whether this recent plateau at 1.74% represents consolidation or a temporary leveling-off before further growth.
Discussion:
In May, the Minnesota inventionINDEX scored a positive sentiment which was higher than the previous year’s average and 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 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.
