Worcester is actually growing. I grew up in that city, lived there for most of my life, though I do not live there anymore. It's not shrinking by any means, just examining the census numbers shows it outpacing Boston in growth 4.9% to 4.8% between 2000 and 2010.
Worcester is at a cross-roads now. It has excellent proximity to Boston and Providence. It has a strong bio-medical industry as well as three highly regarded universities (Holy Cross, WPI, and Clark) as well as several smaller, less known ones. Several major hospitals too. If Massachusetts can sort out the commuter rail situation and cut travel time down to <45min between Worcester and Boston then it could really take off as an alternative to Boston for people with families and on budgets.
It does have its issues. Certain neighborhoods are giant crime-pits (Main South, Vernon Hill etc.) On the other hand it has an extremely safe, pleasant west-side with some pockets of high-affluence. East and North Worcester range from OK to good. It's a very spread out city despite having 180K people living in it which unfortunately means cars are a must.
It's all going to be about transportation. Commuter rail to Boston will improve, part of the deal to allow CSX to expand its freight yard in Worcester was to add 10 - 20 more trains to Worcester between now and 2020. The Pike bypasses Worcester but since the completion of the 146 connector that has stopped being a real issue. If those things occur, and it is a big-if, expect the urban-downtown area of Worcester to boom as it's a small downtown area and it will be important to tightly pack around the train station because of the lack of transportation around the rest of the city.