SOUTH DAKOTA INVENTION INDEX – MARCH 2025

The Invention Index measures a country’s or state’s innovation output by comparing GDP growth with patent production growth. 

South Dakota Invention Index March 2025: 1.04% (B+ grade)

South Dakota Invention Index over the last year:

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).

Analysis:

Comparison with Previous Months:
In March 2025, South Dakota’s Invention Index rebounded to 1.04%, a rise from February’s low of 0.98%. This represents a clear recovery after a notable decline the previous month. Compared to January’s 1.03%, the March score is slightly higher, indicating a return to form after the February dip.

Long-Term Trends:
Over the past seven months, the index has remained relatively stable, with minor fluctuations around the 1.00% mark. The highest point was September 2024 at 1.14%, and the lowest was February 2025 at 0.98%. This reflects a mostly consistent pattern with some variability, but no dramatic long-term increase or decline.

Significant Changes:
February 2025 marks the most significant drop in this period, falling to 0.98%, the only month below 1.00%. This decline is notable especially when following three months of scores above 1.03%. March’s recovery to 1.04% suggests this may have been an isolated dip.

Contextualizing the Data:
The March 2025 score aligns well with the general range observed in prior months, apart from February. It appears to be a normalization rather than the start of a new trend, especially given that it matches November’s score. Thus, the March increase likely reflects a rebound rather than a broader upward trend.

Discussion:

In March, the South Dakota Invention Index scored a positive sentiment which was lower than the previous year’s average but outperformed the downward trend for the year. This is similar to the prior 12 months, which experienced a slight downward trend. As the world continues to recover from the height of the Covid-19 pandemic, it is unclear if there is any backlog of applications awaiting approval or if the department has fully caught up. If approvals are not yet caught up, we may see a decrease in approvals – and a reduced Invention Index – in the coming months/years as the state feels the full economic impact of companies closing and/or being forced to minimize their staffing and therefore minimize their R&D work hours.

Learn more about the Invention Index here.

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 contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.

Who We Are:

Swanson Reed is one of the U.S.’ largest Specialist R&D tax advisory firms. We manage all facets of the R&D tax credit program, from claim preparation and audit compliance to claim disputes.

Swanson Reed regularly hosts free webinars and provides free IRS CE and CPE credits for CPAs.  For more information please visit us at www.swansonreed.com/webinars or contact your usual Swanson Reed representative.