Don Cunningham: Lehigh Valley is Bellwether for the U.S. Economy
By Don Cunningham on August 24, 2015
This column, written by LVEDC President and CEO Don Cunningham, originally appeared in Lehigh Valley Business‘ special “Top 100 Private Companies of 2015” issue, released on August 24, 2015. (Click here to read Cunningham’s previous columns.)
In this issue, Lehigh Valley Business helps bring perspective to the economy of the greater Lehigh Valley and Berks County.
We learn which of those private companies that willingly report their earnings and employment numbers are the largest in our market. Once again, B. Braun tops that list.
It is meaningful to once a year take stock of what is driving our economy, whom is growing and gaining in workforce, which sectors are thriving and which are declining. I refer to this as “know thyself” information.
Beyond satisfying curiosities and pulling out the proverbial tape measure to put the annual pencil marks on the door jam, there is a window into meaningful knowledge of what is making our economy tick. It’s impossible to plan for the future if you know not where you’ve been or where you are.
In politics, for many decades, the Lehigh Valley has been used as a “bellwether” for gauging how America thinks and votes. National and international media often visit during national elections to take the temperature of “middle America” on candidates and issues. Most famously, historian Theodore White wrote in his landmark Making of the President series about tiny Fountain Hill being used by candidates on election night as an indicator of how Americans may be voting.
I submit that the Lehigh Valley economy has long been a microcosm of America’s economy. Initially, we were agrarian-based, led by Pennsylvania German farmers and Moravians, became a cradle of the Industrial Revolution fueled by waves of immigration, transitioned into a center of middle class post-World War II prosperity as we produced the products consumed by Americans and the world, and, ultimately, went through the downturns and declines caused by globalization and the end of manufacturing dominance.
We’ve rebounded and prospered based on a mixed-use, diversified economy that is home to a new, smaller, leaner manufacturing, the explosion of health care as an industry, the emergence of retail e-commerce, and the support economy of logistics and transportation, along with an emergence of innovation, technology and entrepreneurship that are driving job creation in a variety of sectors today. In America’s new economy, small business dominates. Today, in the Lehigh Valley market, more than 70 percent of our 15,000 companies have ten or fewer employees, many of those are start-ups, representing people with new ideas trying them in the marketplace.
In a region where just decades ago, large employers like Bethlehem Steel, Mack Trucks, Western Electric, and numerous textile mills and cement kilns accounted for a solid foundation of jobs, today our health care networks, hospitals and skilled nursing facilities are the largest employer, just as they are in America. And, possibly more so, than in other regions of the country, manufacturing is alive and well, but it’s not your grandfather’s manufacturing. B. Braun is the region’s largest manufacturer, producing medical devices and pharmaceuticals. They are a German-owned company with a global marketplace.
Technology and advanced developments on the shop floor have reduced employment numbers in manufacturing but have driven up economic output. Manufacturing has the second largest share of GDP in the region.
Globalization and technology also has created an interconnected world. And just as internationally owned companies are now common in the U.S., they are quickly becoming a growing base in the Lehigh Valley. There are more than a dozen German owned companies alone today operating in the Lehigh Valley. We are also the home to Pennsylvania’s first Chinese owned manufacturer, Fuling Plastics, which is producing plastic products here in America with Americans.
Once again, the Lehigh Valley is a bellwether for the American economy. I think you will see more of what we are experiencing here across all of America. Most importantly, it is critical to take stock of where we’ve been and where we are to make smart strategic decisions about where we may go. While rapid fire advances in technology change nearly daily how the world works, it is more important than ever to “know thyself,” to understand how the Lehigh Valley looks, who is creating jobs, where and why.
Enjoy the chart of the 100 top businesses of today. There are nuggets of gold buried in what may appear to be a simple list. Let us celebrate the broad-based economic diversity of that list with businesses from nearly every major sector providing a balanced and mixed base of jobs in a diversified economy.
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