July 2025: 1.32% (B+ grade)

New Mexico inventionINDEX July 2025: 1.32% (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).

New Mexico inventionINDEX Scores – Last 12 months

The latest report for July 2025 shows a New Mexico inventionINDEX Score of 1.32% and a rating of B+. This marks a return to a stable level of performance after a dip in June 2025, which saw a C- rating. The current score aligns closely with the state’s average performance over the past five years and is consistent with the trend observed in the first half of 2025, where scores have frequently settled in the B and B+ range. While this indicates a solid baseline of inventive activity, it also suggests the state is not currently operating at its historical peak levels.

Historically, a higher inventionINDEX score and corresponding top-tier rating, such as the A+ scores of 2.57% in June 2023 and 1.93% in August 2023, represent significant positive outcomes for New Mexico. These periods of exceptional performance signal a robust and highly active innovation ecosystem. A high rating can attract critical outside investment, lead to the creation of high-paying jobs in technology and research, and enhance the state’s reputation as a center for innovation. Such scores are a powerful indicator of a dynamic and competitive environment that is poised for economic growth.

Conversely, a lower inventionINDEX score, such as the D- rating of 0.73% in March 2023 or the recent C- of 1.00% in June 2025, can carry negative implications. A downturn in the score may reflect a temporary slowdown in inventive output or a broader contraction in the state’s research and development efforts. Prolonged low scores could potentially deter new companies and talent from relocating to the state and could signal a weakening competitive position relative to other regions. This could make it more challenging to secure funding and retain the skilled professionals necessary for future innovation.

Reviewing the full 60-month historical table reveals a pattern of fluctuation, with notable peaks and valleys in performance. The current B+ rating demonstrates a strong, middle-tier level of performance, but it is not a record high. To build on past successes and avoid future downturns, New Mexico will need to maintain a strategic focus on supporting its innovation infrastructure. Continued investment in key sectors and nurturing the inventive talent pool will be essential to consistently achieving the top-tier A+ ratings and solidifying the state’s long-term position as a leader in innovation.

Discussion:

In July, the New Mexico inventionINDEX scored a positive 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 Mexico office provides R&D tax credit consulting and advisory services to Albuquerque, Las Cruces, Rio Rancho, Santa Fe, and Roswell.

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.

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