PRINCE EDWARD ISLAND INVENTIONINDEX | JUNE 2025

June 2025: 1.33% (A grade)

Vermont inventionINDEX June 2025: 1.33% (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).

The inventionINDEX score for Vermont in June 2025 stands at 1.33%, reflecting a moderate decline compared to the previous month’s 1.60%. While this slight dip might raise questions about the current pace of innovation activity, it remains within a historically stable range. Over the past twelve months, Vermont’s scores have generally fluctuated between 1.13% and 2.00%, suggesting a degree of resilience in its innovation output, even amid occasional month-to-month shifts. Notably, the peak of 2.00% in January 2025 underscores that the state is capable of strong surges in inventive activity when conditions align.

When viewed across the full year, Vermont’s innovation trend reveals several distinct phases. The second half of 2024 saw consistently high scores, with most months holding above 1.50%, suggesting strong momentum heading into 2025. However, the early months of this year have been more volatile. After the January peak, the index declined steadily through April before rebounding in May. The current June score, though lower than May’s, remains ahead of April’s 1.13%, indicating that the recent pullback might not yet signal a longer-term downturn.

Higher inventionINDEX scores typically point to greater levels of inventive output, which can be associated with increased research activity, patent filings, and entrepreneurial development. For Vermont, elevated scores may signal strong performance from local universities, research institutions, or high-tech sectors. This can translate into broader economic benefits, such as job creation in knowledge-intensive industries, increased investment, and enhanced competitiveness in attracting talent and capital.

Conversely, a sustained drop in the index could point to underlying challenges. A weakening innovation environment may reflect funding constraints, slowed R&D pipelines, or a reduction in public-private collaborations. If left unaddressed, such trends could erode the state’s ability to commercialize ideas, attract startup activity, and maintain its technological edge. While a single month’s score does not confirm a trajectory, maintaining consistently strong results is essential for long-term innovation-driven growth in Vermont.

Discussion:

In June, the Vermont 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 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.