April 5, 2024 The Manufacturing Renaissance in Lehigh Valley, PA

Volume 27 | Issue 1

What regions are at the forefront of innovation as the U.S. enters the fourth industrial revolution?

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The Lehigh Valley, a two-county region in eastern Pennsylvania, has been a manufacturing hub since before the American Revolution. In the 19th and 20th centuries, heavy industry dominated the region’s economy. Products made in the Lehigh Valley helped the United States win two world wars and emerge as a global manufacturing powerhouse.

By the end of the 20th century, the Lehigh Valley found itself at an economic crossroads as manufacturing increasingly moved offshore and mainstays of the region’s economy, including steel and textiles, went into decline. Business and community leaders had the foresight to realize that the Lehigh Valley needed to reinvent itself economically to avoid a downward spiral.

Thanks to the advanced manufacturers, food and beverage producers, and technology and life science companies that have established and expanded the Lehigh Valley operations in the last 25 years, the region is today at the center of what’s being called the Fourth Industrial Revolution.

Situated on the border of Pennsylvania and New Jersey, the Lehigh Valley (and its three primary cities of Allentown, Bethlehem, and Easton) is a short drive from Philadelphia and New York City. With a population of 695,000, the Lehigh Valley is the third largest region in Pennsylvania, and one of the state’s fastest growing regions, most notably among the 18-to-34 age group.

As the population has grown, so too has the economy, with a GDP that exceeds $50 billion, and has grown by $10 billion in just the last five years, driven by manufacturing.

A big part of the Lehigh Valley’s economic reinvention is rooted in its manufacturing tradition. We still make things: internationally recognized brands like Crayola crayons, Martin Guitars, and Mack Trucks, and cutting- edge products like optical semiconductors, energy-efficient lighting controls, and in-home diagnostic tests.

More than 700 manufacturers in the Lehigh Valley generate $8 billion in economic output and employ 37,000 people. Manufacturing jobs have grown by 22 percent in the last 10 years, while average annual wages have increased by more than $20,000, contributing to a median household income for the Lehigh Valley that is greater than the national median.

Why are companies drawn to a mid-sized region like the Lehigh Valley? The number one reason is location: 50 million people live within 200 miles of the Lehigh Valley and companies can reach one-third of the U.S. population within a one-day drive. The Lehigh Valley is convenient not only to U.S. consumers, but provides global access, too, with multiple international airports and seaports close by. In addition, the Lehigh Valley offers economic advantages over larger metro areas in the Northeast, including lower operating costs, lower real estate costs, and a more affordable cost of living. The mid-market scale of Lehigh Valley has enabled us to cultivate and sustain strong coalitions among businesses, local and state government, educational institutions, banks, and workforce organizations that contribute to a thriving business environment.

Because of these collaborations, the Lehigh Valley has seen significant manufacturing expansion projects completed in the last five years, including:

• An $84 million expansion of Mack Trucks’ 1 million-square-foot plant, where every Mack product for the North American market is assembled, including its first fully electric heavy-duty truck.
• A $200 million expansion of B.Braun’s medical device manufacturing plant that adds 310,000 square feet of production space that will enable the German company to add 200 new jobs.
• A new innovation hub developed by Evonik, a world leader in specialty chemicals, that comprises more than 60 state-of-the-art testing and processing labs and a pilot plant and created 50 high-paying jobs for scientists, engineers, and lab technicians.
• A 139,000 square-foot manufacturing and distribution center that will enable OraSure Technologies, a Lehigh Valley startup that has become a global leader in point-of-care testing for COVID-19, HIV, and other diseases, to produce 2 million in-home COVID-19 tests per week.
• A 200,000 square-foot distribution center built by guitar manufacturer CF Martin & Co., to keep up with demand for its world-famous instruments that have been the choice for generations of music icons such as Bob Dylan, Neil Young, Elvis Presley, Hank Williams and Willie Nelson.

Educational Institutions Fueling Innovation

The Lehigh Valley’s economic transformation has also been driven by a talented workforce with skills employers are seeking to be successful in a 21st century economy. As the region grows, its commitment to education and workforce development remains a cornerstone. Its talent strategies are directed by a strong partnership between employers and educators that has earned recognition nationally as a best practice in economic development.

The Lehigh Valley is home to 11 colleges and universities – public and private, 2-year and 4-year – that award more than 10,000 degrees each year in a variety of fields that contribute to the region’s talent pool.

Three technical education schools prepare students for a variety of career paths. Lehigh Career & Technical Institute (LCTI) is Pennsylvania’s largest vo-tech school, offering over 45 skills-based programs catering to approximately 2,700 students. Bethlehem Area Vo-Tech School (BAVTS) serves around 1,300 students across 26 programs of study., The Career Institute of Technology (CIT) has 20 programs covering construction, engineering, information technology, health & human services, and manufacturing.

Most recently, a unique new apprenticeship program – Industrial Training and Education Consortium of the Lehigh Valley (iTEC) launched as a partnership of industry, education, government, and community organizations to promote careers in advanced manufacturing. iTEC offers state-registered apprenticeship programs in mechatronics and industrial manufacturing technician career paths. Additional programs for machinists and chemistry lab technicians will be available soon.

Looking ahead

The evolution of the Lehigh Valley into a 21st-century manufacturing hub has transformed our community. The population is growing. Job opportunities are increasing for people of all education levels. Regional prosperity is on the rise. The outcomes produced by the Lehigh Valley’s partnership approach motivate us to persist on this trajectory, aiming for sustained economic growth that benefits every person who lives here and attracts new talent seeking opportunity and an exceptional quality of life.

Don Cunningham is President and CEO of the Lehigh Valley Economic Development Corporation (LVEDC). Prior to leading the region’s economic development organization, Cunningham served in a variety of key public and private positions for three decades in the Lehigh Valley and Pennsylvania. He was twice-elected Mayor of Bethlehem, twice-elected Lehigh County Executive, and the appointed Pennsylvania Secretary of the Department of General Services in Governor Ed Rendell’s administration. He also served as President of the Pennsylvania League of Cities and as a member of Bethlehem City Council. Prior to his public sector career, Cunningham worked for the Fortune 500-company, PPL, in Allentown and served in the Moravian College administration in Bethlehem. He started his career as a newspaper reporter in Bethlehem and Philadelphia and contributes a monthly column on business and economics to The Morning Call newspaper in Allentown.

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