Thomas Boston

Thomas Boston - professor of economics at the Georgia Institute of Technology, past senior economist to the Joint Economic Committee of Congress and author of The Inner City: Urban Poverty and Economic Development in the Next Century (1997) - said lack of access to financing is a well-known problem, but there are lesser-known obstacles for black-owned businesses.

"In particular, discriminatory barriers in the private sector combined with low patronage by black consumers has meant that black businesses are heavily dependent upon government contracting," Boston said.

Boston's firm - Boston Research Group, an Atlanta-based economic consulting company - found in a recent survey of 1,497 of the fastest-growing black businesses that 40.5 percent of black chief executives said discriminatory business practices have affected their growth.At the same time, the survey showed that black consumers are spending only 5 cents out of every dollar of their disposable income with black businesses.In 2002, for example, black consumers spent only $32.1 billion of their $646 billion in disposable income at black-owned businesses.

Even though many of today's black-owned businesses rely heavily on government contracts, Boston said 28.9 percent of black chief executives said their government contracting has decreased during the current economic downturn.

"This is a very pressing problem, but seldom discussed," Boston said."The decline in government contracting is made worse by the fact that courts have now struck down many minority business programs as being unconstitutional."

In addition, business owners in the survey said large companies are now competing for small government contracts that in the past they didn't bother to go after.

"And major corporations have been consolidating the number of suppliers they use and outsourcing abroad," Boston said.