The story began with an unexpected connection between California and Switzerland.

A research team at Bern University of Applied Sciences, studying how small businesses adapt in digital cities, reached out after reviewing interviews from California LIVE Podcast. What followed was a transatlantic collaboration that brought together academics, entrepreneurs, policymakers, and media professionals.

Exclusive conversations were conducted with entrepreneur Firaz Sanjad; Dr. Marwan Chahayed, celebrity doctor chiropractor and founder of MLC Health Group; District Director of the U.S. Small Business Administration Heather Luzzi; producer Colleen Saftler; and Victor Migalchan, Emmy Awards judge, film director and founder of Movieverse Entertainment.

Rather than serving as passive interview subjects, these contributors became part of the research architecture itself – a rare case where independent media intersected directly with academic inquiry. The research, led by Alex Vysokolian, combined academic rigor with real-world insight, focusing on how small businesses navigate visibility, trust, and technological change in contemporary urban environments.

Small Businesses as Economic Infrastructure

Small businesses form the foundational infrastructure of urban economies. Independent cafés, family-owned restaurants, repair shops, neighborhood retailers, and specialized service providers shape the rhythm and identity of cities. They generate employment, circulate local capital, and sustain community relationships.

Despite their importance, these enterprises remain vulnerable. According to data from the U.S. Bureau of Labor Statistics, approximately 20 percent of small businesses close within two years, and nearly half fail to reach their fifth year. Comparable trends are visible in Switzerland and across European markets, particularly in hospitality and retail.

Closures are rarely driven by lack of commitment or quality. Owners typically invest long hours, demonstrate deep professional pride, and build strong personal relationships with customers. Yet many still struggle to survive. As a widely quoted line reminds us:
“It is possible to make no mistakes and still lose. That is not a weakness. That is life.” — Captain Jean-Luc Picard

The deeper challenge lies in visibility, scale, and structural access. While global platforms benefit from centralized data, massive advertising budgets, and algorithmic prioritization, small businesses operate largely in isolation within systems not designed for them.

Why Conventional Marketing Models Underperform

Interviews revealed widespread skepticism toward traditional discount-driven marketing models. Loyalty programs and coupon systems may generate short-term traffic, but many independent operators perceive them as long-term threats to brand value.

For large corporations with extensive product lines, discounts function as acquisition tools. For small businesses, they often feel like erosion.

One owner summarized this perspective clearly:
“I rely on word-of-mouth referrals. If you have a clean name, I think the word spreads much faster.”

When customers are attracted primarily by price incentives, loyalty remains shallow. Repeat visits decline, and trust weakens. Coalition marketing programs modeled after corporate systems frequently concentrate benefits among dominant participants, leaving smaller firms with limited gains.

As a result, independent enterprises struggle to compete collectively against platforms that dominate digital discovery.

Trust, Identity, and Shifting Consumer Expectations

Consumer behavior is undergoing significant transformation. Younger generations, particularly Gen Z, increasingly treat purchasing decisions as expressions of personal identity rather than simple transactions.

Research shows growing interest in origin, transparency, ethical practices, and personal relevance. Customers want to understand who created a product, how it was produced, and why it exists.

As one participant noted:
“I like stories a lot… when I buy something, I want to trust the story behind it.”

Small businesses are naturally positioned to meet this demand. They often possess deep knowledge of their materials, production processes, and motivations. However, many consumers still struggle to translate intention into action.

“I want to buy local,” one interviewee explained, “but it’s not always obvious how.”

At the same time, trust in traditional advertising continues to decline. Consumers report fatigue with polished claims and sponsored content, particularly regarding sustainability. Instead, they increasingly rely on peer recommendations, reputation systems, and AI-based advisory tools perceived as more neutral.

AI as a Discovery Layer for Local Economies

AI systems such as ChatGPT, Gemini, and Perplexity have become embedded in everyday decision-making. Consumers now routinely consult digital assistants for recommendations on services, dining, healthcare, and professional providers.

Their primary limitation is not computational ability, but access to reliable, structured local data. When such information is missing, these systems default to large platforms and generic results.

The opportunity lies in developing shared digital knowledge frameworks for local businesses. Each enterprise contributes verified information about offerings, location, specialization, and value propositions. Together, these inputs form a trusted reference layer.

Rather than promoting a single dominant provider, AI systems can filter relevant local options and present balanced shortlists, supporting informed decision-making.

As Chris Anderson has observed:
“Make everything available and help customers to find it.”

The Long Tail in Local Markets

This collaborative discovery model aligns closely with the long tail theory. Anderson demonstrated that numerous niche offerings, when discoverable, collectively rival mass-market dominance.

Digital platforms such as Spotify and Netflix illustrate how deep catalogs become economically viable through effective recommendation systems. As Anderson notes, “many of our assumptions about popular taste are artifacts of poor matching.”

Local economies operate in similar fashion. Individual workshops, cafés, and service providers serve narrow audiences. Hundreds together create unmatched diversity and resilience.

The limiting factor is not demand, but discoverability.

Collaboration, Risk Mitigation, and Stability

Brand strategist Victor Migalchan emphasizes that many small businesses exhaust themselves attempting to manage branding, technology, compliance, and outreach independently.

From an institutional perspective, Heather Luzzi has highlighted that enterprises embedded in strong local networks demonstrate greater resilience. Financial institutions observe similar patterns: networked businesses recover faster from disruptions and exhibit lower default risk.

AI tools may further support collaboration by identifying complementary partnerships that traditional keyword searches overlook, enabling value creation across sectors.

Cities, Change, and Opportunity

Technological transformation is reshaping urban economies. While rapid change presents challenges, it also enables alternative visibility pathways. As Seth Godin observed, “Change is not a threat; it’s an opportunity.”

Cities grounded in diversity and collaborative infrastructure tend to outperform monocultural economies. Shared discovery systems may strengthen local ecosystems while preserving independence.

Acknowledgements

This research was shaped by the insights and experiences of practitioners and experts who work closely with small businesses every day.

Sincere appreciation goes to Colleen Saftler and Dr. Marwan Chahayed for sharing detailed perspectives on service quality, pricing integrity, and long-term customer trust. Their input highlighted why many small business owners are unwilling to trade value for short-term visibility.

Special thanks are extended to Heather Luzzi from the U.S. Small Business Administration for providing a broad, practical view of the small business ecosystem. Her experience across public institutions and the banking sector helped clarify how collaboration strengthens resilience and reduces systemic risk.

Gratitude is also due to Victor Migalchan for facilitating research connections in California. His expertise in small business branding and systems thinking played a significant role in connecting practitioners, institutions, and ideas that informed this work.