TENNESSEE INVENTIONINDEX | NOVEMBER 2025

November 2025: 1.51% (A+ grade)

Tennessee inventionINDEX November 2025: 1.51% (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

The Tennessee inventionINDEX reached a score of 1.51% in November 2025, maintaining an elite A+ rating. This latest performance reflects a period of sustained strength when viewed against the broader 60-month historical horizon. While the current score is a marginal decrease from the 1.54% recorded in October 2025, it remains significantly higher than the levels observed one year prior, such as the 1.25% score in November 2024. The data suggests that Tennessee has successfully transitioned from a period of moderate volatility in previous years into a more stable and high-performing phase of innovation and intellectual property growth.

A deeper comparative analysis reveals that the 1.51% score sits comfortably above the five-year historical average. In the context of the last 60 months, the state has navigated various shifts, ranging from a historical low of 1.07% in December 2021 to a peak of 1.87% in July 2025. The current rating demonstrates that the state is maintaining its competitive edge even after coming off the record-highs seen earlier in the summer of 2025. By consistently staying within the A to A+ range for the majority of the last two years, the index highlights a maturing innovation ecosystem that has moved past the inconsistent B and C ratings seen in 2021 and 2023.

Higher grades in the inventionINDEX carry substantial positive implications for the regional economy. An A+ rating signals to investors and corporations that the state possesses a fertile environment for research, development, and the commercialization of new technologies. This environment fosters the creation of high-wage jobs and attracts venture capital, as a high index score often correlates with a robust pipeline of patents and startup activity. Furthermore, consistent top-tier ratings improve the state’s reputation as a leader in the knowledge economy, encouraging top-tier talent to remain in or migrate to the area to pursue groundbreaking work.

Conversely, a lower score or a downward trend in the rating carries significant negative risks. When the index dipped to its lowest point of 1.07% in late 2021, it reflected a potential stagnation in creative output or a bottleneck in the commercialization process. Lower scores can lead to a loss of competitive advantage relative to other states, potentially resulting in “brain drain” as innovators seek more supportive environments. A decline toward the B or C range typically suggests that the pace of invention is not keeping up with economic demands, which can eventually slow overall GDP growth and reduce the diversity of the local industrial base. Maintaining the current A+ standard is therefore essential for long-term economic resilience.

Discussion:

In November, the Tennessee inventionINDEX scored a positive 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 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.