NORTH DAKOTA INVENTIONINDEX | DECEMBER 2025

December 2025: 1.02% (C+ grade)

North Dakota inventionINDEX December 2025: 1.02% (C+ 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 Dakota inventionINDEX Scores – Last 12 months

The December 2025 North Dakota inventionINDEX score of 1.02% represents a shift toward a more conservative innovative environment compared to the performance seen earlier in the year. While the index maintained a stable 1.04% through October and November, the current C+ rating marks a noticeable departure from the exceptional 1.23% peak achieved in September 2025. This recent cooling suggests a period of transition within the state’s creative and technical sectors, as the score now sits below the year-opening figure of 1.14% recorded in January.

A longitudinal view of the last sixty months reveals that North Dakota’s innovation levels are prone to cyclical fluctuations, though the current standing remains comfortably above historical troughs. The index reached its lowest point of 0.96% in October 2022, a D rating that serves as a reminder of past volatility. When compared to the robust performance of 2024, which concluded with a high A+ rating of 1.12% in December, the current 1.02% reflects a moderate slowdown. Despite this, the index has shown resilience by staying above the 1.00% threshold, a benchmark it has struggled with only twice in the past five years.

Maintaining a higher grade, such as the A+ ratings frequently observed throughout 2023 and 2024, yields substantial benefits for the regional economy. High scores indicate a surge in patent filings, technological breakthroughs, and a proactive approach to research and development. These periods of peak performance typically attract increased venture capital and encourage a culture of entrepreneurship that retains top-tier talent within North Dakota. A high rating acts as a signal to global markets that the state is a primary hub for intellectual property creation and industrial evolution.

Conversely, a lower score like the current C+ rating carries implications that warrant careful consideration by stakeholders and policy leaders. Lower scores may suggest a temporary bottleneck in the innovation pipeline or a reduction in the resources allocated to experimental projects. If the index continues to drift toward the lower percentiles, there is a risk of diminished competitive advantage relative to other growing tech corridors. Addressing these dips requires a focus on bolstering infrastructure and providing the necessary support to ensure that North Dakota returns to the high-performance trajectories seen during its most productive months.

Discussion:

In December, the North Dakota inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed 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 North Dakota office provides R&D tax credit consulting and advisory services to Fargo, Bismarck, Grand Forks, Minot,and West Fargo.

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.