Georgia Tech Ivan Allen College of Liberal Arts

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Thomas "Danny" Boston
Professor, School of Economics 

A Practical Approach to Community Development: Thomas D. Boston Applies Economic Tools to Social Problems

Thomas D. "Danny" Boston's research is more than just an academic responsibility -- it's his passion.

An economics professor in the School of Economics, he is an expert on minority business and entrepreneurship as well as community economic development. Boston's research activities include background research, commissioned by the Congressional Black Caucus Foundation, for the Congressional subcommittees responsible for updating the Small Disadvantaged Business (SDB) programs.

One of Boston's primary goals has been to include minority- and women-owned businesses in the national dialogue about small businesses. "What most people fail to comprehend is that together, minority- and women-owned small businesses comprise just over 50 percent of the nation's 27 million small businesses." More importantly, he continued, "they are the fastest-growing segments of small businesses when measured by the change in the absolute number of businesses, in revenue growth and in job creation. They represent the emerging sector among America's small businesses."

Danny Boston pull quote

According to Boston, it's important for the nation to understand that minority-owned businesses and women-owned businesses add significantly to national output and employment. Supported by the federal contracting process, they provide an "effective approach to economic stimulus, poverty reduction, community revitalization and job creation, especially among minority workers in distressed central cities."

In light of all the adverse reaction and litigation surrounding affirmative action, Boston continued, "The question becomes, how do you operate government programs to give minority- and women-owned businesses access to markets and opportunities, and at the same time do so constitutionally?"

A tremendous amount of research goes into developing goals and guidelines for these programs, he pointed out, "and the courts look for a lot of research when they make a decision on whether or not the programs are constitutional."

Boston frames outcomes from the SDB and similar programs in terms of their impact on the overall economy. His findings are based on figures and statistics, first compiled in 2007 and now being updated, on the 19,237 minority-owned businesses registered with the U.S. government's Central Contractor Registration (CCR) system. These businesses comprise about 40 percent of the total number of CCR companies, even though minority businesses account for about 18 percent of all businesses in the nation. The numbers suggest that minority businesses rely on government contracts more than their non-minority counterparts do, Boston noted.

Of these CCR-listed minority contractors, 6,758 performed work through SDB programs in 2006, which accounted for $3.7 billion of their revenues (out of their combined total earnings of $19.2 billion) and created 86,038 jobs, Boston said. Add another 2,848 minority companies that had previously been awarded contracts through the SDB program, and the annual contribution to the U.S. economy by minority participants swells to $5.5 billion and 124,000 jobs annually.

"These revenues and jobs would not have existed without the program," Boston emphasized.

Boston also found that 31 percent of these minority-owned companies are headquartered in areas where poverty was 20 percent or higher -- places with the greatest need for jobs, income and economic development. In Baltimore and Philadelphia, for example, the percentage of companies based in high-poverty areas is even higher -- 69 percent and 60 percent, respectively. In addition, a survey of black-owned small businesses with 10 to 100 employees found that 67 percent of the workforce in these companies is African-American.

Summarizing his research findings in 2010 before a joint hearing of the House subcommittees on Housing and Community Opportunity and Oversight and Investigations, Boston noted that during the first quarter of 2009, at the height of the recession, 82 percent of all new jobs were added by small businesses, primarily those with 50 or fewer employees. Many of these small businesses are minority-owned and operated.

So while SDB programs are important in mitigating the effects of discrimination in private markets, Boston told the committee, their role as an economic stimulus is also substantial. Supported by the federal contracting process, they provide an "effective approach to economic stimulus, poverty reduction, community revitalization and job creation among minority workers in distressed central cities."

To track the minority- and women-owned small-business sector on an ongoing basis, Boston created the Gazelle Index. The Index is the first-ever national quarterly survey of the current conditions, level of optimism and hiring plans of small businesses that also focuses on minority and women-owned businesses. It is based on a random survey of 630 small-business owners and CEOs. The results are published on the web site, www.gazelleindex.com. The site also includes information designed to assist business owners launch and operate their businesses more successfully.

Boston presented the Index for the first time in September 2011 at a Senate roundtable discussion sponsored by Senator Mary Landrieu (D-La.). He formally unveiled the Index at a Symposium on Small Businesses in the Economy, sponsored by the Federal Reserve Board of Governors. The symposium opened with a speech by Fed Chairman Ben Bernanke on the importance of small businesses. Boston's intention is that the Index will become a leading indicator of economic activity. "I want to make sure that minority- and women-owned businesses become a part of the broader small-business conversation," he said. The site has ranked #1 in Google search results in six of its eight search tags related to minority, women and small business hiring and outlook.

Boston's research also extends to re-thinking the ways in which the government provides housing assistance to low-income families. More than a decade ago, the federal government created HOPE VI, a multi-billion-dollar program to allow cities to experiment with alternative approaches to public housing assistance. At the time, Atlanta had some of the nation's most blighted public housing projects and was a prime candidate for experimentation. Atlanta was an early and aggressive recipient of HOPE VI funds, which helped low-income families move out of distressed public housing and supported the construction of new, mixed-income communities.

"Families were given housing-choice vouchers they could use to move anywhere in the city where they could find rental property," said Boston. "Initially there was tremendous resistance to the idea because public housing families and housing advocates were skeptical regarding the real intentions of the housing authority. Georgia Tech played an instrumental role in convincing families to accept the change because it contained a commitment to include a new elementary school in each new mixed-income community."

The housing authority worked with real estate agents to help relocate the families who did not move into the mixed income communities, Boston explained, adding that "Atlanta is the only city where all the old public housing has been demolished and replaced with mixed-income developments or housing vouchers."

"My interest was in determining whether or not, or to what degree, the opportunity to relocate to better communities created greater self-sufficiency. Or put another way, does living in a more diverse community impart an incentive and example to live a better, more productive life? When the Department of Housing and Urban Development wanted to find out about the outcomes of the experiment, the Atlanta Housing Authority enlisted Boston's help.

"I developed a methodology whereby I could track every family and every person in the household on a year-to-year basis," he said. "Not just a random survey of a few families, but all of the families -- about 20,000 families and about 55,000 people."

His key data came from the detailed applications that each family has to complete before receiving housing assistance. The records contain information for each family member such as age, sex, race, educational background, work experience and sources of income. The application must be updated every year.

Geographic information systems software and census data, along with crime reports, housing values, and school performance data, provided descriptive information about the characteristics of the families' new neighborhoods.

Boston has been keeping up with the families for the past five years, and he's still at it. The results are impressive.

"There have been dramatic increases in labor-force participation, increases in earnings, and increases in family income, and reductions in dependency on welfare and public assistance," he said. "I've also found that kids who live in those families perform better in school. The major motivations for these families to relocate are, first, they want to get away from crime and, secondly, they want to get in a neighborhood where their kids can go to a better school."

One of the Atlanta revitalization projects that Boston studies bore Georgia Tech's mark even before his research started. Techwood Homes, located adjacent to campus, was the nation's first public housing project, built in 1936. By the 1980s, Techwood had become synonymous with every negative stereotype about public housing: crime, poverty, drugs and decay. Conditions at the local elementary school reflected the distress of the surrounding community. The entire area was razed in 1996 and replaced with a mixed-income development, which included a new elementary school.

Many of the student-performance improvements noted in Boston's research came about because of Georgia Tech's involvement in the new school.

"Students and faculty at Tech helped design a new math- and science-centered curriculum and computer labs," Boston said. Faculty also interviewed prospective teachers.

"They have social workers in the school now, and parents are obligated to attend a certain number of teacher conferences during the year," he noted. "And it's in the lease agreements that kids can't have unexcused absences from school."

The original school, Fowler Street Elementary, was one of the city's worst. Its replacement, Centennial Place Elementary, is among the city's top five, Boston said. "They've set the bar high, and as a result the outcomes have been extremely good."

Boston's work caught the attention of the MacArthur Foundation. "They were very interested in the research I was doing because they were funding community revitalization programs in Chicago, but didn't know the outcomes." Supported with a substantial MacArthur grant, Boston has extended his perform outcome analysis to Chicago where he is tracking about 25,000 families. He is also doing a comparison between the outcomes in Atlanta and Chicago.

The prestigious grant emphasizes the growing reputation of the Ivan Allen College of Liberal Arts in the social sciences generally, and in economic development in particular.

For Boston, the research's appeal is that it's a "practical application of economic skills and tools. I've always been interested in policy-related issues as opposed to theoretical issues, so for me this is right in the ballpark."

Plus, he added, "it has social value and it helps people's lives. That's why I get so caught up in it and why I like it so much."


Thomas D. Boston
Professor, School of Economics

Dr. Thomas “Danny” Boston is a Professor of Economics in the School of Economics at Georgia Tech, where he has taught since 1985. Danny is also CEO of EuQuant, which is an economic research company that specializes in business analytic and urban planning. In July 2011, the Atlanta Tribune Magazine ranked EuQuant as the #2 black-owned business in the State of Georgia as measured by commitment to community, wealth of knowledge, vision, and financial prowess. Furstrated by the lack of timely data and information on small businesses, he launched the Gazelle Index (www.gazelleindex.com) in November of 2011. The blog focuses on the economy and small businesses; including, minority and women-owned business performance and hiring. The blog currently ranks #1 - #4 in Google search results related to its "Tags". A native of Jacksonville, Florida, he completed undergraduate studies at West Virginia State University and the PhD Degrees in Economics at Cornell University, where he specialized in economic development and macroeconomics. He is a former Capt. in the U.S. Army and recipient of the Purple Heart.

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