Forecasts about the digital revolution's future depend on the potential for induced innovation. Sometime in the next two decades, physical barriers will limit our ability to make transistors any smaller. If the determinists are correct, nothing can be done, except to wait for a new source of technological change. Researchers respond not just to rewards but also to costs. This creates another channel through which digital information technology will encourage technological change.
Search costs limit our discovery of valuable new arrangements.
Over time, we have found some useful combinations. Mix iron and carbon together with small amounts of manganese, chromium, nickel, molybdenum, copper, tungsten, cobalt, or silicon, and you can produce a range of different steel alloys. Arrange silicon, some impurities, and some metals in just the right way, and you get a microprocessor. But nature shows us that we have a long way to go. By pure trial and error, evolution found a way to mix carbon, oxygen, hydrogen, and a few other elements into the seed for a tree.