NORTH CAROLINA INVENTIONINDEX | DECEMBER 2025

December 2025: 1.76% (A+ grade)

North Carolina inventionINDEX December 2025: 1.76% (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 historical data for the North Carolina inventionINDEX over the past 60 months reveals a narrative of significant growth and stabilization within the state’s innovative landscape. Ending the five-year period in December 2025 with a score of 1.76 percent and an A plus rating, the index demonstrates a matured environment for intellectual property development. While the final score of 2025 is slightly lower than the year’s peak of 2.47 percent in July, it remains part of a broader trend of high-level performance. When compared to the early stages of this 60-month window, such as the 1.12 percent score in December 2021, the current standing reflects a substantial long-term advancement in the state’s creative and technical output.

A year-over-year analysis highlights a clear transition from volatility toward consistent excellence. In 2021 and 2022, the index frequently fluctuated between B minus and A ratings, hitting a historical low in late 2021. However, the data from 2024 and 2025 shows a marked shift, with the A plus rating becoming the standard rather than the exception. This progression suggests that the infrastructure supporting innovation in North Carolina has become more robust and resilient. Even during months where the percentage score dipped slightly, the rating often remained in the A range, indicating that the qualitative strength of the state’s inventions has stayed high despite minor quantitative variances.

The positive outcomes of maintaining these higher grades are multifaceted and vital for economic health. An A plus rating serves as a powerful signal to venture capitalists and global corporations that North Carolina is a premier destination for research and development investment. High scores often lead to a virtuous cycle of talent attraction, where the presence of a thriving intellectual property ecosystem draws in top-tier engineers, scientists, and entrepreneurs. This concentration of expertise not only drives the creation of new startups but also strengthens the collaborative ties between the state’s university systems and the private sector, ensuring a steady pipeline of marketable breakthroughs.

On the other hand, the negative implications of a lower score or a declining rating could pose significant risks to the state’s competitive position. A return to the lower percentages seen in 2021 might indicate a stagnation in the commercialization of new ideas or a lack of support for emerging technologies. Such a downturn could result in a loss of momentum, potentially causing skilled professionals to seek opportunities in more active innovation hubs. Furthermore, a lower inventionINDEX score can dampen investor enthusiasm, making it more difficult for local companies to secure the funding necessary for expansion. Sustaining the current high performance is therefore essential to avoiding economic inertia and maintaining North Carolina’s status as a leader in the global knowledge economy.

Discussion:

In December, 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.