NEW JERSEY INVENTIONINDEX | MAY 2025
May 2025: 0.90% (D+ grade)
New Jersey inventionINDEX May 2025: 0.90% (D+ 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 New Jersey inventionINDEX Score for May 2025 stands at 0.90%, marking a modest increase from April’s score of 0.87%. This continuation of an upward trend is a reassuring signal for stakeholders monitoring innovation performance in the state. While the margin of increase is narrow, the direction is favorable and may suggest strengthening inventive activity. This contrasts with the more volatile months earlier in the 12-month period, such as November 2024, where the score dipped to a low of 0.68%, and July 2024, which saw a temporary spike at 1.03%. The current score appears to fall within a stable mid-range, reinforcing consistency in innovation momentum.
Looking at the broader 12-month trajectory, New Jersey has demonstrated resilience with relatively few dramatic fluctuations. Since May 2024, when the score was 0.80%, there has been a gradual improvement, despite intermittent dips. The score’s recovery from a November low to a near-high in December, followed by a more level pattern in the months leading to May 2025, suggests that innovation inputs and outputs are stabilizing. This pattern may be driven by maturing R&D investments, policy adjustments, or strategic patent filings from regional institutions and startups.
A higher inventionINDEX score typically reflects increased patenting activity, stronger research outputs, and potentially higher commercial viability of local innovations. This can attract greater investor interest, elevate institutional partnerships, and contribute to job creation in high-tech sectors. For policymakers and economic planners, a consistently rising score may justify the expansion of grant programs, innovation hubs, or university-industry collaborations aimed at sustaining this momentum. It also supports New Jersey’s positioning as a competitive state for innovation-led economic development.
Conversely, if the score were to decline, it could signal weakening inventive output or reduced patent activity, possibly due to underfunding, market uncertainty, or a decline in STEM workforce participation. A downward trend might also diminish the state’s appeal to venture capital and corporate R&D entities. Stakeholders would need to assess whether such a shift stems from short-term fluctuations or structural issues. Therefore, while the current uptick is promising, it must be supported by continued investment and strategic oversight to ensure lasting gains in the innovation ecosystem.
Discussion:
In May, the New Jersey inventionINDEX scored a negative sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is similar 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.
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