NEW JERSEY INVENTIONINDEX | AUGUST 2025

August 2025: 1.47% (A+ grade)

New Jersey inventionINDEX August 2025: 1.47% (A+ 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).

New Jersey inventionINDEX Scores – Last 12 months

The New Jersey inventionINDEX for August 2025 stands at a robust 1.47%, earning an A+ grade. This performance marks a significant improvement compared to the preceding months and years. For instance, the August 2024 score was a lower 0.72% with an F grade, and August 2023 was 1.13% with a B- grade. This upward trajectory in August 2025 suggests a period of heightened innovation output within the state, indicating a potentially stronger economic recovery and a more dynamic business environment.

A higher inventionINDEX score, particularly an A+ grade, signifies a positive sentiment regarding New Jersey’s innovation landscape. This positive outlook is often associated with increased patent production growth relative to GDP growth, which can attract investment, foster job creation, and stimulate further research and development. Such a strong performance can position New Jersey as a leader in innovation, contributing to long-term economic stability and prosperity. The consistent improvement observed in the recent August figures, especially when contrasted with the previous year’s average, underscores a promising trend for the state’s economic future.

Conversely, lower inventionINDEX scores, such as the F grades seen in November 2024, August 2024, and April 2023, carry negative implications for the state’s economic health. A low score suggests a weaker innovation output, potentially indicating a slowdown in patent activity or a less robust connection between innovation and economic growth. This can lead to reduced investor confidence, slower economic recovery, and a less competitive market. Periods of lower scores may also reflect underlying economic challenges, such as reduced R\&D capabilities or lingering effects from broader economic incidents.

Analyzing the historical data, while August 2025 shows a strong performance, there have been fluctuations over the 60-month period, with scores ranging from F to A+. The overall trend, however, reveals that the state has experienced periods of both strong and weaker innovation. The current A+ grade for August 2025 is a positive indicator, suggesting that New Jersey is currently experiencing a favorable environment for innovation. Maintaining and building upon this momentum will be crucial for sustained economic growth and continued competitiveness in the national and global innovation landscape.

Discussion:

In August, the New Jersey inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed 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 New Jersey office provides R&D tax credit consulting and advisory services to Newark, Jersey City, Paterson, Elizabeth, Edison, Woodbridge, Lakewood, Toms River, Hamilton and Trenton.

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.