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Worcester County lies at the center of Massachusetts and largely defines the Commonwealth's Central Region. Economic flows here have traditionally run north and south along the Blackstone River Valley—a natural link connecting the city of Worcester to Providence, Rhode Island. The development of new knowledge-based industries over the past decade, however, has enhanced the region's ties to the east, and especially to the Greater Boston economy.

The Providence and Worcester Railroad runs through the valley and ties these two urban centers together, as does Route 146, a newly expanded north-south highway. Both Providence and Worcester have their own airports, with T.F. Green in Providence providing an alternative to Boston's Logan International Airport for domestic flights. While T.F. Green is doing very well, Worcester Regional Airport has been dealt a potentially devastating blow by the recent departure of all scheduled commercial airlines from the facility.

The periphery of the Boston economy is now on the doorstep of central Massachusetts, and the region is feeling the effects of this development.

Central Massachusetts is commonly divided into three distinct subregions running from north to south: North-Central, Metro Worcester, and the Blackstone Valley. The North-Central subregion has the highest concentration of manufacturing employment in central Massachusetts. It is home to a large number of plastics and furniture manufacturers, primarily based in Fitchburg, Leominster, and Gardner. While the plastics industry is becoming increasingly innovative and positioned for sustained growth, the furniture industry continues to search out means and methods to maintain a long-term competitive position.

Worcester is New England's third largest city. Through the nineteenth century, first river-powered, then steam-powered industrial mills were key to the city's economy. While manufacturing remains important, the Worcester metro area has become the region's trade and service center. The biotechnology industry has also taken hold, offering a significant opportunity for long-term growth.

The Blackstone Valley was the initial home of the nation's Industrial Revolution, and this subregion, too, retains a significant manufacturing orientation. Route 146 has begun to generate development of all kinds, becoming a significant conduit for travel and trade both within the region and across state lines.

There is little evidence of significant economic ex-change between central Massachusetts and regions to the west. The Quabbin Reservoir, Boston's chief source of drinking water, runs north and south along the region's western border and blocks easy access to the Pioneer Valley. On its eastern fringe, however, the I-495 corridor has grown substantially in recent years, bringing companies and people to towns like Westborough and Northborough. The periphery of the Boston economy is now on the doorstep of central Massachusetts, and the region is feeling the effects of this development.

Employment Trends
The services sector is by far the largest in the Central Region, representing over 38 percent of total employment. In 2000, manufacturing, long the region's engine of growth, accounted for nearly 19 percent of total employment, while retail trade accounts for roughly 17 percent. None of the other major sectors accounted for more than 5.3 percent of total employment.

In 1991, there were 334,000 people employed in the region. Ten years later, the number had increased to 372,000, an 11.4 percent gain. Data for the North-Central subregion indicate a similar pace of workforce and employment growth. Employment in the state as a whole rose a bit faster, at 12.4 percent.

With the exception of a small decline in 2000, employment has continued to grow, at least modestly, despite the recession. Faster labor force growth has led to a rising unemployment rate, from a decade low of 2.8 percent in 2000 to 3.7 percent in 2001, and again to 5.5 percent in 2002.

Sectoral Analysis
The services sector is by far the largest in the Central Region, representing over 38 percent of total employment. In 2000, manufacturing, long the region's engine of growth, accounted for nearly 19 percent of total employment, while retail trade accounts for roughly 17 percent. None of the other major sectors accounted for more than 5.3 percent of total employment.

Construction employment, with more than 50 percent growth, and services employment, with over 30 percent growth, were the two fastest-growing divisions, other than the small agriculture sector. Due to major layoffs by insurance carriers in the Worcester area, the finance, insurance, and real estate division was alone among the major divisions in experiencing declining employment.

Population
The region's population growth exceeded the statewide rate in both the 1980s and the 1990s. It jumped 10.1 percent in the 1980s, twice the pace of the Commonwealth, and by 1990 accounted for 12 percent of the statewide total. During the 1990s, population in the Central Region grew by 6 percent, compared to 5.5 percent statewide.

Shifts in the region's age distribution echo state and national trends. The leading edge of the baby-boom generation, approaching retirement, expanded the size of the 45-to-64 age group by nearly one-third from 1990 to 2000. Other significant changes, also seen across the state and nation, are a sharp decline in the 19-to-24 age group and a nearly 11 percent rise in the population under 18. Given these trends, the retention of the region's younger residents is essential to ensuring the availability of workers to support future economic growth.

The Central Region's population is approximately 89.7 percent non-Hispanic White, 2.8 percent Black, and 2.6 percent Asian. While all populations grew in the 1990s, the number of Black residents increased by more than 30 percent, over twice the 14 percent rise in the state overall. The Asian population also increased dramatically, but the region's 69 percent increase closely mirrors the state's 66 percent gain. The region's Hispanic population also grew rapidly, expanding by more than half. In 1990, Hispanics made up 4.6 percent of the population; their share grew to 6.7 percent in 2000. The share of the population that is White has declined somewhat since 1990.

Outlook
The Central Region is still in flux. As furniture and other traditional manufacturing firms have declined over the past decade, new industries have been launched. On one hand, this turbulence is positive. Modern jobs have increasingly replaced those that no longer make economic sense. This turbulence, however, also creates significant challenges to the region's long-term prosperity. A skilled workforce has been a strong asset. Blue-collar workers are highly skilled in precision tooling, mold making, fiber optics, and other manufacturing trades. These workers, coupled with the presence of the region's 14 major institutions of higher education, make central Massachusetts an optimal location for firms that combine research and development with precision production.

The region is hard-pressed to meet the labor needs of its employers, and the situation will likely worsen when the recession ends.

The movement toward a more modern economy has meant that workers with minimal skills are being left behind. The region is also attracting new immigrants with little education and the need for language training. There is danger of a widening gap between the skilled, educated, and relatively prosperous on one side and the unskilled and uneducated on the other. This problem will become more important as three other factors come into play: an aging population, a dramatic decline in the number of 19- to 24-year-olds entering the workforce, and the 4 percent unemployment rate, which means there are not many workers available for employment. The region is hard-pressed to meet the labor needs of its employers, and the situation will likely worsen when the recession ends. In short, the region must ensure that all its citizens are prepared to meet the workplace needs of the future.

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