Legislators from Germany who are seeking to spark industrial revitalization in their communities and structural change in their economies and societies got to hear the Lehigh Valley’s story for inspiration.
Don Cunningham, President and CEO of Lehigh Valley Economic Development Corp. (LVEDC) was invited to speak during Aspen Institute Germany’s visit to Harrisburg on June 21.
The Aspen Institute Germany, located in Berlin, is an independent, nonpartisan think tank that strives to foster dialogue among diverse parties on key issues. Within its project Laboratories of Democracy, state legislators from the United States and Germany are developing policy recommendations for economic, social, and environmental development that can be applied on a state level and jointly by the transatlantic partners.
Cunningham was invited by Pennsylvania State Rep. Ryan Mackenzie to address a delegation that included legislators from across Germany along with Mackenzie; Pennsylvania State Sen. Dave Argall; and state legislators from Kansas, Mississippi, New Mexico, Oklahoma, Rhode Island, and Wyoming.
"The Lehigh Valley has transformed economically over the past 30 years, but we are still blessed with strengths such as a terrific geographic location and a workforce skilled in manufacturing," Mackenzie said. "It was a great pleasure to host a delegation of state legislators from the U.S. and Germany here in Pennsylvania. I’m glad that LVEDC was able to join us so that we could highlight the Lehigh Valley, discuss economic development efforts in the area, and explain why it is such a great location to live and work."
During the discussion, moderated by Dr. Stormy-Annikae Mildner, Executive Director of Aspen Institute Germany, Cunningham traced the transition of the Lehigh Valley economy. He explained how it changed from being centered on making steel and other labor-intensive heavy industrial products to now making critical medial equipment; technological components; food and beverages; consumer goods; and other items through advanced manufacturing processes.
He explained how the region’s economy continues to be driven by manufacturing, with 750 producers generating $8.4 billion in output annually. That makes the Lehigh Valley a Top 50 market.
He said one of the primary advantages of the Lehigh Valley is its location. Located 90 minutes from New York City and 60 minutes from Philadelphia, the Lehigh Valley is within a day’s drive of one-third of U.S. consumers. That provides speed to market for manufacturers.
Successfully marketing your community as an attractive place to do business begins with a deep and honest self-examination, Cunningham told the delegation.
“Anytime you're looking at economic transition and transformation, you have to focus on first, what are your key assets and tailor your strategy to what your assets are,” Cunningham said.
Developing a sufficient and educated workforce is key to driving economic growth, he said.
The Lehigh Valley has a substantial, skilled workforce and is fortunate to be growing – nearing 700,000 people – and is a leader in growth of the key demographic of 18-to-34-year-olds, Cunningham explained.
He said a critical element in the Lehigh Valley’s success is the preponderance of colleges and universities – 11 that graduate a total of 10,000 students annually – and three technical and career schools that are completed by 1,000 students annually.
But transforming an economy takes more than a prime location and an ample labor force, Cunningham said. It takes determination and collaboration.
“More than more than anything, you have to be willing to look ahead to what's next and not hang on to what used to be the thing that produced jobs and defined the community,” he said.
Cunningham told of growing up as the son of a steelworker in Bethlehem and being elected mayor. Three months into his term, Bethlehem Steel closed. The community knew the mill would be closing eventually, but that didn’t soften the sting. The region felt it had lost its identity. But it had to move on.
The Lehigh Valley has succeeded by building partnerships to work toward a common goal, he said.
“We try to work strategically as best we can in consortium with the education community, our large employers, our public sector leadership on what is around the corner, and trying to align ourselves to what our assets are and what we can do for tomorrow.”
“If you get engagement from a strong private sector employment community, partnered with higher education and the public sector and develop in concert a strategy, your likelihood of success is going to be great,” Cunningham said.
Cunningham, Argall, and Mackenzie said Pennsylvania is trying to encourage business growth by incrementally reducing its corporate net income tax rate from 9.99% to 4.99% over the next decade. The group discussed the value of incentives such as the Neighborhood Improvement Zone in Allentown, where some taxes are redirected back to new development to pay for the cost.
There was discussion about how some states, counties and cities incentivize talent, providing grants and other payments to workers who move there.
Workers in some counties in Kansas can qualify for up to $15,000 toward the purchase of a home or childcare-related expenses if they work for a local company. Michigan offers scholarships of up to $10,000 to students to attend three universities if they commit to working at least a year with manufacturers of electric vehicles.
Pennsylvania does not have similar programs.