SOUTH DAKOTA INVENTIONINDEX | OCTOBER 2025

October 2025: 0.97% (D grade)

South Dakota inventionINDEX October 2025: 0.97% (D 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

The South Dakota inventionINDEX for October 2025 stands at 0.97%, earning a ‘D’ grade. This score indicates a negative sentiment, falling below the previous year’s average and underperforming the upward trend observed throughout the year. Examining the historical data over the last 60 months reveals that while fluctuations are common, a ‘D’ grade is among the lower ratings, suggesting a period of reduced innovation output compared to many preceding months. For instance, the index consistently achieved ‘A’ or ‘B’ grades for much of 2024 and 2023, with scores frequently above 1.03%.

A higher inventionINDEX grade, typically anything above a ‘C’, signifies positive sentiment and robust innovation output. These periods often correlate with economic growth and a healthy environment for patent production, which is a key component of the index. Sustained periods of high scores, such as the multiple ‘A+’ ratings seen in May 2025, September 2024, August 2023, April 2023, May 2022, March 2022, January 2022, October 2021, August 2021, March 2021, February 2021, January 2021, and December 2020, suggest a thriving innovation ecosystem capable of contributing significantly to economic recovery and resilience.

Conversely, a lower score, particularly a ‘D’ grade as observed in October 2025, implies negative implications for innovation. This could indicate a slowdown in patent production relative to GDP growth, potentially signaling challenges in research and development, company closures, or reduced workforces. Such trends, if prolonged, could hinder economic recovery and reflect a less dynamic innovation landscape. The current October 2025 score, being a ‘D’, suggests a need to monitor the underlying factors influencing South Dakota’s innovation output closely.

Analyzing the 60-month trend, the South Dakota inventionINDEX has experienced both periods of strong performance and occasional dips. The current ‘D’ grade in October 2025 is a notable decline from the ‘A-‘ and ‘B+’ grades seen in the preceding months of 2025 and 2024, respectively. While the index has historically rebounded from lower scores, the current negative sentiment warrants attention as it deviates from the more positive trends observed in many of the past 60 months. This historical context underscores the importance of fostering an environment conducive to innovation to maintain a positive economic outlook.

Discussion:

In October, the South Dakota inventionINDEX scored a negative sentiment which was lower than the previous year’s average and underperformed the upward trend for the year. This is similar to the prior 12 months, which experienced an 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.