EDITOR’S NOTE: The optimal industry target selection is based on the site-specific characteristics of the Lehigh Valley economy. Using results from the previously completed Competitive Realities Report, the Assets and Challenges Assessment, focus groups, and field visits, four industry targets were chosen that best match the unique competitive advantages in the area to the needs of particular industry sectors. Special attention is given to industries in the midst of significant change or innovative transformation with the strong likelihood that there will be increased interest in adding or moving operational sites. Each sector selected has a record of above-average wages, projected positive growth, and participation in commercial activities that will create wealth in Lehigh Valley in both the short- and long-term.

Because economies are dynamic and impossible to precisely predict, these four optimal targets offer opportunities across several non-competing sectors, affording a means to diversify economic development strategies and avoid risky over-concentration.

Prospects are particularly interested in an established and skilled workforce as well as the region’s capacity to supply newly trained workers, so special efforts were made to link in-demand occupations and training to the region’s available workforce and supply pipeline.

The target information is presented in a practical and workable format, avoiding complex analysis and extensive projections of future outcomes. Instead, the justifications for the targets should be clearly apparent and make sense to the average practitioner. Under each major target sector a list of individual subsectors is provided with accompanying NAICS classifications.

For each target, a bulleted list of rationales is presented and identified as appealing to the needs of prospects (P) or the community (C). This material can be used in marketing and community support efforts or to help economic development personnel prioritize targeting efforts.

OPTIMAL TARGET #1: HIGH PERFORMANCE MANUFACTURING

Lehigh Valley is well positioned to take advantage of expanding opportunities in the manufacturing sector. After several decades of employment decline, US manufacturing switched direction mid-2010 and has since been adding workers at an annual pace of more than 200,000 net new jobs. The High Performance Manufacturing target is a select group of high-wage industries that are expected to experience exceptional growth and align well with Lehigh Valley’s unique assets.

While diverse in products made and markets served, the entities that comprise the target group all share a heavy reliance on engineering skills. Overall engineering occupations comprise 4.6 percent of total manufacturing employment in the United States; whereas, the High Performance Manufacturing target demands that 9.5 percent of its workers are in engineering occupations. The high proportion of engineering skills places the group among those industries expected to benefit from advances in additive or 3D manufacturing, industrial robotics, digitalization, and the movement towards more in-house prototyping and design.

The targeted subsectors are mostly mid-stream operations—meaning they serve several downstream sectors and benefit from not having to rely on a narrow client base or single industrial trend. Two major developments underlie future growth. One is the demand to replace and modernize the global network of aged and outdated infrastructure systems. This development is epitomized by growing demands from utilities, new domestic energy markets, and advances in chemical manufacturing processes. The other development is the rush to respond to technological change. The rise in final product innovations, rapidly changing customer demands, increasingly complex computerized systems, and new applications in automation are a few of the trends that characterize the pressures and opportunities around which this target is positioned to take advantage.

Rationale

• Presence of Lehigh University’s Center for Manufacturing Systems Engineering. (P)

• Among top recommended industry target in stakeholder focus groups. (C)

• Central location and well-developed transportation infrastructure. (P)

• Availability of water and sewer lines to industrial sites. (P)

• High relative proportion of residents with bachelor’s degrees in engineering. (P)

• 740 post-secondary completions in year 2012 from local institutions in engineering fields. (P)

• Electrical Equipment & Component Manufacturing cluster demonstrates the highest measure of local specialization. (P)

• Local Manufacturing sector exhibits a strong local competitive effect. (P)

• High relative broadband rank, measuring access and capacity. (P)

• Average target subsector national earnings of $80,533. (C)

• Average target subsector five-year forecasted growth of 10.5 percent. (C)

• Strong existing local pool of high-demand occupations. (P)

• 422 annual post-secondary completions in critical fields from local institutions. (P)

• Local Production occupations earn 9.1% above the same group national median. (C)

• Quality of place assets: ample opportunities for cultural activities, recreation, shopping. (P)

NEXT WEEK: Optimal target 2, High Value Business Services.