NORTH CAROLINA INVENTIONINDEX | AUGUST 2025

August 2025: 1.75% (A+ grade)

North Carolina inventionINDEX August 2025: 1.75% (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).

North Carolina inventionINDEX Scores – Last 12 months

The North Carolina inventionINDEX for August 2025 stands at 1.75%, earning an A+ rating. This score reflects the state’s innovation output, which is determined by comparing GDP growth with patent production growth. While maintaining a strong positive sentiment, this August 2025 figure is noteworthy when viewed against the preceding months. For instance, it is lower than the 2.47% recorded in July 2025 and October 2024, yet it is higher than the 1.50% from August 2024. This fluctuation suggests a dynamic rather than static performance in innovation, inviting a deeper look into contributing factors.

A consistently higher inventionINDEX score and a favorable grade, such as an A+, indicate robust economic health and a thriving environment for innovation. Such positive sentiment implies strong intellectual property generation, which often correlates with increased investment in research and development, job creation in high-tech sectors, and overall economic resilience. States with higher innovation indices are typically better positioned to adapt to economic shifts and recover from downturns, as their economies are driven by forward-thinking industries and technologies. This makes a higher grade a significant indicator of a state’s long-term economic prospects.

Conversely, a lower inventionINDEX score and a less favorable grade would signal potential challenges within the state’s innovation ecosystem. A decline could suggest a slowdown in patenting activity, potentially due to reduced R\&D expenditure, a less favorable business climate for innovators, or even lingering effects from economic disruptions. Such conditions could lead to decreased economic competitiveness, fewer opportunities for high-skilled employment, and a slower pace of economic recovery. It highlights areas where policy interventions or strategic investments might be necessary to stimulate innovation and bolster economic growth.

Over the past 60 months, North Carolina has generally maintained strong inventionINDEX ratings, frequently achieving A or A+ grades. While there have been periods of slight dips, such as the B+ in August 2024 and December 2023, the overall trend suggests a resilient innovative spirit. The August 2025 score, while positive, prompts consideration of how current economic conditions and specific industry trends might influence future innovation output. Understanding these trends and their underlying causes is crucial for maintaining and enhancing North Carolina’s position as an innovative state.

Discussion:

In August, the North Carolina inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed 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 North Carolina office provides R&D tax credit consulting and advisory services to Charlotte, Raleigh, Greensboro, Durham, Winston Salem, Fayetteville, Cary, Wilmington, High Point, Greenville, Asheville, Concord, Gastonia, Jacksonville, Chapel Hill, Rocky Mount, Huntersville, Burlington, Wilson and Kannapolis.

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.