Worcester, Mass., has rebuilt its hollowed-out industrial economy around biotechnology and grown to the largest population in its history, even as a shortage of lab space and housing threatens to slow the boom, The Boston Globe reported on Sunday.

At one of three sites run by Massachusetts Biomedical Initiatives, a nonprofit incubator for life sciences companies, the demand is visible. The building opened in 2020 with 25,000 square feet of office and lab space, added 15,000 square feet of manufacturing space by 2023 and is now nearly full, with 44 companies and more on the way in.

“We can’t grow fast enough to keep up with demand out here,” said Jon Weaver, the president and chief executive of the incubator, known as MBI.

That growth matters beyond one city. State policy makers have worried for decades that Massachusetts leaned too heavily on Boston and its universities and hospitals, a dependence now exposed as the Trump administration cuts research and education funding, putting thousands of Eastern Massachusetts jobs at risk, and as demographic shifts shrink college enrollment. A century ago the state was a patchwork of single-industry cities — textiles, shoes, toys, firearms — and today’s so-called Gateway Cities are rebuilding that diversity one niche at a time.

Worcester’s niche is life sciences, and it has limits. Only around 8 percent of companies started at MBI have stayed in the city, a figure Mr. Weaver attributes mainly to the dearth of private lab buildings for graduates of the incubator. “For a long time, Worcester was trying to sell potential,” he said. “Now, we have to figure out ways to scale and grow the market that’s here.”

The city was once an industrial powerhouse whose machinery ran textile mills and whose factories turned out wire, steel, tools and early automobiles. Globalization closed those plants in the second half of the 1900s. The population peaked above 200,000 in 1950, slid to 162,000 by 1980, then climbed back past 200,000 by 2020. The share of residents with a bachelor’s degree or higher rose 22.5 percent over the past decade, according to the city’s 2024 housing needs assessment.

The turn began in 1965, when the University of Massachusetts trustees put the university’s new medical school in Worcester. In the 1980s the Worcester Business Development Corporation acquired part of the former Worcester State Hospital for what became the Massachusetts Biotechnology Research Park; the local chamber created MBI in 1984; and Gov. Michael S. Dukakis named Worcester a biotechnology “center of excellence” in 1985. The research park lured the German drugmaker that became AbbVie in 1989, and the company remains a major employer. A 46-acre site next door, called the Reactory, is now getting a $300 million, nearly 190,000-square-foot biomanufacturing plant from the Chinese company WuXi Biologics.

“We’re seeing a transformation from a heavy-industrial type base to a more service economy, and the life sciences helped us diversify a lot more,” Craig Blais, president of the Worcester Business Development Corporation, told The Globe.

The ecosystem pulled in Hannah Sheehan Sauve and Jeff Sauve, a married couple in their 30s who left jobs near Boston to start SauveBio, which sells flow cytometry services to drug companies. They chose Worcester for MBI, which charges around $2,500 a month for its smallest startup lab and offers mentoring, shared equipment and introductions to investors. Ms. Sheehan Sauve called the city a “thriving community,” with less stress than Boston.

City officials have marketed that pitch hard. The Red Sox’s Triple-A affiliate, the WooSox, moved from Rhode Island in 2021, and commuter service between the renovated Union Station and Boston has grown to more than 20 round-trips a day, though the ride to South Station still takes about an hour and 45 minutes. “Bostonians no longer see Worcester as a ‘far-away place’ but as ‘a complementary hub,’” Timothy Murray, president of the Worcester Chamber of Commerce, told The Globe.

The old Gateway City problems persist: a lagging median income, rivals like Devens, Westborough and Framingham competing for businesses, and slow housing growth. Worcester added around 1,900 units from 2020 to 2025, a 2.3 percent increase, according to The Boston Foundation, but the city’s housing production plan estimates it will need roughly 11,600 more rentals and 850 owner-occupied units by 2033. Rents run below Boston and Cambridge while construction costs do not, so projects rarely pencil out without public-private partnerships and subsidies, said Peter Dunn, the city’s chief development officer.

Other Gateway Cities are chasing their own versions: New Bedford is building marine technology work around its port, Lowell is drawing defense and engineering firms through the University of Massachusetts Lowell, and a Pittsfield incubator received a state grant for an advanced optics cluster. In Worcester, Mr. Weaver said he expects rents will eventually rise enough to make new lab buildings feasible — the step on which the rest of the bet now rests.