SOUTH DAKOTA INVENTIONINDEX | AUGUST 2025
August 2025: 1.06% (A- grade)
South Dakota inventionINDEX August 2025: 1.06% (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).
South Dakota inventionINDEX Scores – Last 12 months
| Month | inventionINDEX Score |
| August 2025 | 1.06% |
| Jul 25 | 1.02% |
| Jun 25 | 1.00% |
| May 25 | 1.09% |
| Apr 25 | 1.00% |
| Mar 25 | 1.04% |
| Feb 25 | 0.98% |
| Jan 25 | 1.03% |
| Dec 24 | 1.07% |
| Nov 24 | 1.04% |
| Oct 24 | 1.02% |
| Sep 24 | 1.14% |
| Aug 24 | 1.03% |
The South Dakota inventionINDEX for August 2025 stands at 1.06%, securing an A- rating. This score represents a notable improvement when viewed against the preceding month of July 2025, which registered a 1.02% with a C+ rating. While it is slightly below the May 2025 peak of 1.09% (A+), the current August score generally aligns with the positive sentiment observed in the latter half of 2024, maintaining a healthy distance from the lower D+ ratings seen in February 2025 and December 2023. This suggests a sustained, robust environment for innovation in the state.
A higher inventionINDEX score and corresponding grade, such as the current A-, indicates a strong and favorable climate for innovation within South Dakota. This positive sentiment reflects a greater rate of patent production relative to GDP growth, signaling a dynamic economy where new ideas and technologies are being generated and commercialized effectively. Such an environment often leads to increased economic resilience, job creation, and attracting further investment in research and development, fostering long-term prosperity.
A lower inventionINDEX score, particularly one falling below a C grade as defined by the framework, points to a negative outlook or sentiment regarding innovation. Instances like the 0.96% D- in February 2023, or the 0.98% D+ scores in February 2025, December 2023, and December 2021, suggest periods where patent output growth is not keeping pace with economic growth. This can imply a slowdown in innovation, potentially leading to reduced competitiveness, fewer new businesses, and a more challenging economic recovery during downturns or other economic incidents.
Analyzing the 60-month historical data reveals fluctuations, but the consistency of A and B grades for a significant portion of the period underscores South Dakota’s general strength in innovation. Even with occasional dips into the C and D range, the state has consistently rebounded, demonstrating an underlying capacity for innovation. The current A- grade in August 2025, following a slight dip in June, further reinforces this trend of resilience and a prevailing positive momentum in the state’s innovation output.
Discussion:
In August, the South Dakota inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed the downward trend for the year. This is in contrast to the prior 12 months, which experienced a slight upward 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 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.
Are you eligible?
Why choose us?
Pass an Audit?
What is the R&D Tax Credit?
The Research & Experimentation Tax Credit (or R&D Tax Credit), is a general business tax credit under Internal Revenue Code section 41 for companies that incur research and development (R&D) costs in the United States. The credits are a tax incentive for performing qualified research in the United States, resulting in a credit to a tax return. For the first three years of R&D claims, 6% of the total qualified research expenses (QRE) form the gross credit. In the 4th year of claims and beyond, a base amount is calculated, and an adjusted expense line is multiplied times 14%. Click here to learn more.
Never miss a deadline again
Stay up to date on IRS processes
Discover R&D in your industry
R&D Tax Credit Preparation Services
Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed provides state and federal R&D tax credit preparation and audit services to all 50 states.
If you have any questions or need further assistance, please call or email our CEO, Damian Smyth on (800) 986-4725.
Feel free to book a quick teleconference with one of our national R&D tax credit specialists at a time that is convenient for you.
R&D Tax Credit Audit Advisory Services
creditARMOR is a sophisticated R&D tax credit insurance and AI-driven risk management platform. It mitigates audit exposure by covering defense expenses, including CPA, tax attorney, and specialist consultant fees—delivering robust, compliant support for R&D credit claims. Click here for more information about R&D tax credit management and implementation.
Our Fees
Swanson Reed offers R&D tax credit preparation and audit services at our hourly rates of between $195 – $395 per hour. We are also able offer fixed fees and success fees in special circumstances. Learn more at https://www.swansonreed.com/about-us/research-tax-credit-consulting/our-fees/
Choose your state
