July 2025: 1.87% (A+ grade)

Tennessee inventionINDEX July 2025: 1.87% (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).

Tennessee inventionINDEX Scores – Last 12 months

Based on the provided historical data for the last 60 months, the Tennessee inventionINDEX exhibits a dynamic and fluctuating pattern, with a notable recent peak. The score for July 2025 stands at 1.87% with an A+ rating, which marks the highest point in the entire period presented. This recent performance shows a strong upward trend from the previous months, particularly when compared to June’s 1.44% and the previous year’s July 2024 score of 1.49%. The overall scores have ranged considerably, from a low of 1.07% to the current high, indicating periods of both exceptional strength and relative weakness within the innovation ecosystem.

A higher inventionINDEX score and a top-tier rating, such as the numerous A+ grades seen over the last five years, signify a thriving environment for innovation and economic growth. These periods of elevated performance suggest that the state is successfully attracting and fostering creative talent, leading to increased patent filings, startup creation, and intellectual property development. A sustained high score can attract significant investment from venture capital firms and corporations looking to partner with or acquire innovative companies. It also signals a competitive edge, making the region a more desirable location for highly skilled professionals and new businesses to establish themselves.

Conversely, a lower inventionINDEX score, such as the 1.07% C+ rating from December 2021 or the various B- and B ratings, can indicate a potential slowdown in the innovation sector. These scores may reflect periods of decreased entrepreneurial activity, fewer patent applications, or a less supportive climate for technological advancement. The negative implications of a lower score can include difficulty in attracting and retaining top-tier talent, a less competitive economic standing compared to other states or regions, and a potential reduction in the flow of private investment. A consistent downward trend could be a signal that systemic challenges are hindering the development of new ideas and technologies.

In conclusion, the historical table reveals that the Tennessee inventionINDEX is not static but rather a responsive metric of the state’s innovation health. While there have been periods of lower scores that may warrant closer examination, the most recent performance represents a significant achievement and a positive signal for the future. The data underscores the importance of maintaining a supportive and robust environment for innovation to sustain high scores, which in turn leads to broader economic benefits and a stronger position for the state in the national landscape.

Discussion:

In July, the Tennessee 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 Tennessee office provides R&D tax credit consulting and advisory services to Nashville, Memphis, Knoxville, Chattanooga, Clarksville, Murfreesboro, Franklin, Jackson, Johnson City, and Bartlett.

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.

Admin US