July 2025: 1.59% (B+ grade)

Washington inventionINDEX July 2025: 1.59% (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).

Washington inventionINDEX Scores – Last 12 months

The Washington inventionINDEX for July 2025 stands at 1.59%, earning a B+ rating. This marks a notable improvement from the previous month’s score of 1.06% and C rating in June 2025. This rebound places the current score well above the recent low point and closer to the higher scores seen earlier in the year. While not reaching the peak scores of previous years, this score represents a solid performance and suggests a positive shift from the downturn observed in early summer.

A higher inventionINDEX score and corresponding grade are indicative of a robust and dynamic landscape for innovation. A score in the A or A+ range, such as the 1.81% achieved in March 2024, signals a period of significant intellectual property creation and technological advancement. These elevated ratings are often correlated with increased venture capital investment, the successful commercialization of new ideas, and the attraction of top-tier talent to the region. This creates a virtuous cycle where a strong reputation for innovation further fuels economic growth and solidifies a region’s position as a global leader.

Conversely, a lower score, like the 0.96% with a C- rating in April 2025, can have negative implications. A declining inventionINDEX may suggest a cooling in the pace of innovation, potential challenges in the commercialization of new technologies, or a general slowdown in the creative economy. Such trends could lead to a decrease in economic competitiveness, a flight of intellectual capital to other regions, and a perception that the environment for new businesses and research is less favorable. Sustained low scores can erode the foundation for long-term growth and leadership in key sectors.

Looking at the broader 60-month history, the inventionINDEX has experienced periods of volatility, with scores fluctuating between a low of 1.06% and a high of 2.28%. The current score of 1.59% aligns with the long-term average, demonstrating consistency despite the month-to-month changes. The index serves as a critical barometer for the health of the innovation ecosystem. The recent increase in July 2025 is a positive development and will be a key metric to observe in the coming months to determine if it signals a new period of accelerated growth or simply a return to the established trend.

Discussion:

In July, the Washington inventionINDEX scored a positive sentiment which was higher than the previous year’s average and outperformed 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 Washington office provides R&D tax credit consulting and advisory services to Seattle, Spokane, Tacoma, Vancouver, Bellevue, Kent, Everett, Renton, Federal Way, and Yakima.

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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