TENNESSEE INVENTIONINDEX | OCTOBER 2025
October 2025: 1.54% (A+ grade)
Tennessee inventionINDEX October 2025: 1.54% (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
| Month | inventionINDEX Score |
| October 2025 | 1.54% |
| Sep 25 | 1.84% |
| Aug 25 | 1.40% |
| Jul 25 | 1.87% |
| Jun 25 | 1.44% |
| May 25 | 1.37% |
| Apr 25 | 1.51% |
| Mar 25 | 1.56% |
| Feb 25 | 1.75% |
| Jan 25 | 1.56% |
| Dec 24 | 1.55% |
| Nov 24 | 1.25% |
| Oct 24 | 1.66% |
The Tennessee inventionINDEX for October 2025 stands at 1.54%, earning an A+ grade. This score, while positive, is slightly lower than the previous month’s 1.84% (September 2025) and also below the average of the preceding year. Over the last 12 months, the index has shown a slight upward trend, with fluctuations, indicating a generally healthy but not consistently accelerating innovation output. Comparing this to earlier periods, such as October 2024 (1.66%) or even October 2023 (1.61%), reveals that the current score, while strong, is not at its peak within recent history.
A higher inventionINDEX score and a corresponding A grade signify robust innovation output, which is crucial for economic resilience and growth. Positive sentiment, indicated by grades above C, suggests a thriving environment for patent production relative to GDP growth. This can lead to increased investment, job creation, and overall economic recovery, particularly in a post-pandemic landscape. States with consistently high inventionINDEX scores are better positioned to adapt to economic shifts and foster a dynamic business ecosystem.
Conversely, a lower inventionINDEX score, or a grade below C, points to a potential slowdown in innovation. This can have negative implications for economic outlook, suggesting that patent production is not keeping pace with GDP growth. Such a trend might indicate reduced research and development capabilities, company closures, or a less favorable environment for new ideas to flourish. These factors can hinder economic recovery and long-term prosperity, making it more challenging for a state to compete and innovate.
Examining the historical data over the past 60 months reveals a dynamic performance for the Tennessee inventionINDEX. While the index has predominantly maintained A and A+ ratings, there have been instances of B and B- grades, such as November 2024 (1.25%, B) and April 2023 (1.18%, B-), and even a C+ in December 2021 (1.07%). These fluctuations underscore the importance of continuous monitoring to identify underlying trends and address any factors that might impede innovation. The overall trend, despite monthly variations, suggests a generally strong commitment to innovation in Tennessee, with occasional dips that warrant closer examination.
Discussion:
In October, 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 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 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.
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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.
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