SOUTH DAKOTA INVENTIONINDEX | APRIL 2025

April 2025: 1.00% (C- grade)

South Dakota inventionINDEX April 2025: 1.00% (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).

South Dakota inventionINDEX – 6-Month Performance Analysis

Over the past six months, South Dakota’s inventionINDEX Score has fluctuated modestly, indicating a relatively stable innovation climate with slight dips and recoveries. The current score of 1.00% for April 2025 reflects a minor decline from March (1.04%) and December (1.07%), which stood as the peak during this period. February 2025 marked the lowest point at 0.98%, yet this dip was followed by a rebound, illustrating some resilience in inventive activity.

A higher inventionINDEX Score generally suggests a healthier environment for innovation, potentially driven by increased patent filings, research outputs, or startup activity. The strong score in December 2024 likely reflected seasonal investment cycles or the culmination of grant-driven R&D. These peaks often correlate with job creation in tech sectors, heightened academic-industry collaboration, and a broader economic multiplier effect across the state.

Conversely, the drop to 0.98% in February and the current decline to 1.00% raise concerns about possible slowdowns in funding, talent retention, or regulatory barriers. A declining score could imply reduced competitive edge, stagnation in IP development, or weakening infrastructure for tech-based entrepreneurship, especially in rural areas.

Despite minor downward trends, South Dakota’s average score remains above 1.00% over six months, signaling consistent engagement in innovative practices. Policy efforts focusing on sustained investment and STEM education may help stabilize and enhance future scores.

Discussion:

In April, the South Dakota inventionINDEX scored a negative 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 South Dakota office provides R&D tax credit consulting and advisory services to Sioux Falls, Rapid City, Aberdeen, Brookings, and Watertown.

Feel free to book a quick teleconference with one of R&D tax specialists at a time that is convenient for you, 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.