July 2025: 1.47% (A+ grade)

Vermont inventionINDEX July 2025: 1.47% (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).

Vermont inventionINDEX Scores – Last 12 months

The Vermont inventionINDEX for July 2025 is 1.47%, a score that has earned an A+ rating. This marks a notable increase from the prior month’s score of 1.33% with an A rating, indicating a positive shift in the state’s innovation landscape. While this recent score is slightly below the 60-month average of 1.52%, it reflects a period of consistent performance. Over the past year, the index has generally maintained a high standard, frequently achieving the A+ rating, with only a few exceptions. This recent upward trend suggests a strengthening of the factors that contribute to Vermont’s innovative capabilities.

Comparing the July 2025 score to the broader historical data reveals a dynamic picture. The highest score on record within the last 60 months was a significant 3.00% in February 2023, while the lowest was 0.60% in September 2022, which resulted in an F rating. The current score of 1.47% falls comfortably within this historical range. The data shows that the index experienced a period of lower scores and ratings, such as D- and D, from late 2020 through mid-2022, before entering a period of elevated performance with scores frequently exceeding 2.00% during much of 2023. The present value, while not at the peak levels of 2023, is indicative of a stabilized and healthy innovative environment.

A higher inventionINDEX score and a corresponding top-tier rating like A+ signify a robust and thriving ecosystem for innovation. This can lead to a variety of positive outcomes for the state. Elevated scores are often correlated with increased patent filings, a rise in new business formations, and greater investment in research and development. This environment fosters job creation in high-growth sectors, attracts skilled talent, and can lead to a stronger and more diversified economy. A consistent record of high scores can also enhance the state’s reputation as a leader in innovation, creating a virtuous cycle of further growth and development.

Conversely, a sustained period of lower scores and ratings, such as the D- or F observed in the past, can have negative implications. A declining inventionINDEX may signal a slowdown in key innovation metrics, which could potentially lead to economic stagnation. It could indicate a lack of investment, a decrease in entrepreneurial activity, or an inability to attract and retain top talent. If left unaddressed, a lower score could erode confidence in the state’s economic future and hinder its ability to compete on a national and global scale. Therefore, the index serves as an important barometer for the health of Vermont’s innovation economy.

Discussion:

In July, the Vermont inventionINDEX scored a positive sentiment which was lower than the previous year’s average but outperformed the downward trend for the year. This is similar to the prior 12 months, which experienced a considerable 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 Vermont office provides R&D tax credit consulting and advisory services to Burlington, South Burlington, Rutland, Barre, and Montpelier.

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.

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