July 2025: 1.21% (A+ grade)

Pennsylvania inventionINDEX July 2025: 1.21% (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).

Pennsylvania inventionINDEX Scores – Last 12 months

The inventionINDEX for July 2025, standing at 1.21% with an A+ rating, represents a significant positive development when viewed in the context of recent scores. This score marks a notable increase from the previous month’s 1.07% (B- rating), demonstrating a strong rebound in inventive activity. While the index has experienced fluctuations over the past 60 months, the current A+ rating places it among the highest performances recorded in the last year, signaling a robust and productive period for innovation within the state.

A higher inventionINDEX score and corresponding top-tier rating, such as the recent A+, typically indicate a thriving ecosystem for creativity and technological advancement. A strong score can serve as a powerful indicator of economic health, suggesting a fertile environment for new patents, research breakthroughs, and business creation. This, in turn, can attract substantial investment, foster the growth of high-tech industries, and create high-value employment opportunities. Sustaining an A+ rating is often associated with a state’s ability to position itself as a national leader in specific sectors, driving long-term prosperity and global competitiveness.

Conversely, a lower inventionINDEX score, such as the 1.00% C rating seen in November 2024, can have negative implications. A downturn in the score may signal a period of stagnation or a slowdown in the pace of innovation. This could result from various factors, including a decrease in research and development funding, a migration of talent to other regions, or a challenging economic climate that discourages new ventures. Such a decline in inventive output could erode the state’s competitive advantage and make it more difficult to attract and retain the intellectual capital necessary for future growth.

Observing the full 60-month historical table reveals that the inventionINDEX is subject to periodic fluctuations, with several periods of both high and low performance. Scores have ranged from a low of 1.00% to a high of 1.48%. While the recent A+ rating is encouraging, the historical data suggests that maintaining a consistent top-tier performance is a continuous challenge. This underscores the importance of ongoing support for innovation to ensure that the positive momentum from the July 2025 score can be sustained and that the inventionINDEX continues to reflect a vibrant and forward-thinking economy.

Discussion:

In July, the Pennsylvania inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed 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 Pennsylvania office provides R&D tax credit consulting and advisory services to Philadelphia, Pittsburgh, Allentown, Erie, Reading, Scranton, Bethlehem, Lancaster, Harrisburg, Altoona, York, State College, Wilkes Barre, Chester, Williamsport, Easton, Lebanon, Hazleton, New Castle and Johnstown.

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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