June 2025: 1.14% (B grade)

Texas inventionINDEX June 2025: 1.14% (B 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).

The inventionINDEX score for Texas in June 2025 stands at 1.14%, marking a slight decline from the previous month’s 1.18%. This dip places the state below its recent peak of 1.31% in October 2024, and well under the high point of 1.29% from July 2024. While the current figure doesn’t indicate a dramatic drop, it reflects a modest cooling in inventive activity when viewed against the broader 12-month trajectory. The index had shown resilience through the end of 2024 and early 2025, making this recent tapering a development worth monitoring.

Compared to earlier in the year, the June score suggests a softening in momentum. From January to April 2025, the index consistently hovered above the 1.20% mark, suggesting a period of strong patent output or inventive filings. However, the last two months have seen consecutive decreases, potentially pointing to a slowdown in innovation pipelines or reduced activity from key contributors in the state. This could be due to seasonal fluctuations, policy shifts, or industry-specific trends, such as reduced R&D spending or delays in patent processing.

A higher inventionINDEX score generally signals robust innovation, increased intellectual property activity, and a potentially more competitive economic environment. For Texas, maintaining an upward trajectory can translate into broader investment in emerging technologies, talent attraction, and economic diversification. Consistently high scores can also enhance the state’s reputation as a leader in innovation-driven sectors, including energy, healthcare, and aerospace.

On the other hand, if the score continues to decline, it could suggest waning inventive output or challenges in sustaining research activity. Over time, a downward trend might reflect structural issues such as diminished university-industry collaboration, reduced venture capital engagement, or shifts in federal funding. If not addressed, these could impact long-term economic growth and the state’s ability to lead in innovation-intensive fields. Therefore, while the current figure does not raise immediate concern, close attention should be paid to upcoming data points to determine whether this is a short-term dip or the start of a longer trend.

Discussion:

In June, the Texas inventionINDEX scored a positive sentiment which was lower than the previous year’s average and underperformed the downward trend for the year. This is similar 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 Texas office provides R&D tax credit consulting and advisory services to Houston, San Antonio, Dallas, Austin, Fort Worth, El Paso, Arlington, Corpus Christi, Plano, Laredo, Lubbock, Garland, Irving, Amarillo, Grand Prairie, Brownsville, McKinney, Frisco, Pasadena and Mesquite.

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.

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