Ranking second in the U.S. in 2022 for new economic development projects among mid-sized regions helps make the Lehigh Valley a unique and inspirational story, according to U.S. Rep. Ro Khanna, D-Calif.
The Philadelphia native and Silicon Valley congressman visited the Lehigh Valley recently to learn more about its economic transformation, and its developing of a diverse manufacturing sector making food and beverages, technology, medical equipment, and consumer goods.
Khanna said in a release that he could “feel the prosperity within like a minute of coming into a town compared to other places.”
Having authored books on the importance of U.S. manufacturing in relation to the economy and the need to create additional jobs in technology, Khanna is seeking to develop a national strategy for economic development. He joined in a 90-minute roundtable discussion on June 28 held in Bethlehem’s Lehigh Valley Economic Development Corp. (LVEDC). The discussion was part of Khanna’s three-day tour of Pennsylvania and Ohio.
Citing the Lehigh Valley’s economic development, Khanna said it’s important to find how to have the same kind of economic strategy in other parts of the country.
Rep. Susan Wild, D-Allentown/Bethlehem/Easton/Bangor, joined Khanna and leaders from business, education, labor, municipal government, regional organizations, and workforce development. The group spoke about the factors making the Lehigh Valley economy a prosperous one, and what they needed from the federal government to grow manufacturing and technology jobs.
“I just am so proud of this area, and just how advanced we are, and how we are just really lighting the world on fire, if you ask me, when it comes to manufacturing and tech and that kind of thing,” Wild said.
The roundtable discussion noted the correlation between economic prosperity and quality of life. A collective $8.4 billion in annual output from the region is generated by more than 750 manufacturers. That total amounts to 18% of the Gross Domestic Product (GDP) in the region. Manufacturing on a national level represents 12% of the GDP.
Don Cunningham, president and CEO of LVEDC, said the Lehigh Valley sees economic development as a collaboration involving the public and private sectors. He said the region benefits from its close location to Philadelphia and New York City and pointed out its growing population and career and education system.
“Probably our biggest challenges today are the ramifications of success 20, 25 years ago,” Cunningham said.
Population growth and increased business and development has led to added traffic and a demand for housing that increases prices. Wild said there are companies that would be interested in the Lehigh Valley but may be concerned about the lack of housing.
Khanna and Wild were asked by officials from B. Braun Medical and Tyber Medical to pass legislation rescinding a tax code change that took effect in 2022. As it now stands, the cost of development must be deducted over five years, rather than being deductible in total immediately.
“So, we spend the money all in one year to develop new products, grow and gain, and now it is not deductible, and it’s only deductible one-fifth a year. Well, that’s creating massive tax bills for us,” said Damien Sibilla, chief financial officer at Tyber Medical in Bethlehem.
To focus on ensuring that regions have an adequate and skilled workforce, Cunningham said economic development strategies must evolve, with help from policymakers. He noted that some states, cities, and regions have gotten creative and developed financial incentives for people who relocate for employment.
Cunningham said immigration policy is critical when it comes to building a labor pool.
“Every economic boom in American history has been fueled by immigration,” Cunningham said. “It seems to me, the only thing we talk about in the U.S. is the southern border and illegal immigration. We don’t talk about a broader immigration policy.”
Participants in the roundtable were: Khanna; Wild; Cunningham; Sibilla, Chief Financial Officer at Tyber Medical; Matt Tuerk, Mayor of Allentown; Sunny Ghai, Upper Macungie Township supervisor and business leader; Dan McCarthy, Lehigh Valley Partnership Secretary and LVEDC Board Member; Michael Cacace, Vice President of Corporate Tax at B. Braun Medical; Angelo Valletta, President and CEO of Ben Franklin Technology Partners of Northeastern Pennsylvania; Paul Anthony, business manager and financial secretary of IBEW Local Union #375 and LVEDC Board Member; Andy Hammer, Executive Director of the SkillsUSA Council for the Lehigh Valley; and Karianne Gelinas, Vice President of Regional Partnerships & Talent.