...and particularly our new economy, will increasingly obey the logic of networks. Understanding how networks work will be the key to understanding how the economy works.
Any network has two ingredients: nodes and connections. In the grand network we are now assembling, the size of the nodes is collapsing while the quantity and quality of the connections are exploding. These two physical realms, the collapsing microcosm of silicon and the exploding telecosm of connections, form the matrix through which the new economy of ideas flows.
A single silicon transistor today can only be seen in a microscope. In a few years it will take a microscope to see an entire chip of transistors. As the size of silicon chips shrinks to the microscopic, their costs shrink to the microscopic as well. In 1950 a transistor cost five dollars. Today it costs one hundredth of a cent. In 2003 one transistor will cost a microscopic nanocent. A chip with a billion transistors will eventually cost only a few cents.
What this means is that chips are becoming cheap and tiny enough to slip into every object we make. Eventually, every can of soup will have a chip on its lid. Every light switch will contain a chip. Every book will have a chip embedded in its spine. Every shirt will have at least one chip sewn into its hem. Every item on a grocery shelf will have stuck to it, or embedded within itself, a button of silicon. There are 10 trillion objects manufactured in the world each year and the day will come when each one of them will carry a flake of silicon.
This is not crazy, nor distant. Ten years ago the notion that all doors in a building should contain a computer chip seemed ludicrous, but now there is hardly a hotel door in the U.S. without a blinking, beeping chip in its lock. These microscopic chips will be so cheap we'll throw them away. Thin slices of plastic known as smart cards now hold a throwaway chip smart enough to be your banker. If National Semiconductor gets its way, soon every FedEx package will be stamped with a disposable silicon flake that smartly tracks the contents of the package on its journey. And if an ephemeral envelope can have a chip, so can your chair, each bag of candy, a new coat, a basketball. Soon, all manufactured objects, from sneakers to drill presses to lamp shades to cans of soda, will contain a tiny sliver of embedded thought.
And why not?