Today is a day to celebrate not Murphy's Law but Moore's Law.

Today is a day to celebrate Moore's Law. I've talked about this from time to time. Gordon Moore, a founder and former CEO of Intel, coined Moore's Law, which states that the cost of doing anything with a computer would fall 50% every 18 months. Today, that inexorable decline brought the cost of executing one million instructions per second (MIPS) below one penny. The new Intel Core Duo processor that runs at 2.13 gigahertz, which equates to just over 20,000 MIPS, is down to $200 retail and about $180 for volume purchases. If you divide $200 by 20,000 MIPS, you get one penny per MIPS.

When I started my first technology investment newsletter in 1982, I bought an IBM PC with an Intel 80286 processor running at six megahertz that could do 0.9 MIPS. The computer cost me $3,000, and then I paid another $2,000 for a five megabyte Seagate hard disk drive. As I recall, the processor alone sold retail for $950, so my cost per MIPS was about $1,055. Thanks to Moore's Law, the cost of computing went from $1,055 per MIPS to one penny in 24 years, almost to the day. A megabyte of disk storage today costs three cents, down from $400 per megabyte when I bought my Seagate drive in 1982. DRAM storage costs have been on a similar downward spiral.

And that, folks, is why the technology revolution is unstoppable. I had been worried that Moore's Law might run out of gas around 2010 to 2012, because that's as far as the semiconductor equipment roadmap goes, based on current technology. But Intel told me that they now think they know how to stay on the Moore's Law curve past 2020. That means every ordinary $1,000 multimedia PC will have the intelligence of a human being by 2018 -- a 24/7 assistant that never takes coffee breaks or vacations, and never wants a raise. The changes coming in our society -- the way we work, play, recreate, communicate and live -- are going to be bigger than what we've seen in the last 24 years. That's why I hope as many of those Ford workers as possible spend their buyout bonus on getting computer/Internet training and starting a business -- the opportunities in the tech sector are immeasurable.

I know that changing one's thinking from the economics of scarcity to the economics of abundance is not easy. But "freeconomics" means looking at your numerous racks of CDs and thinking: "Wait a minute -- if the electronics are free, why can't I carry 10,000 songs in my pocket?"
A column by Michael Schrage in the Financial Times talked about the power of free: "Never in history has so much innovation been offered to so many for so little. The world's most exciting businesses -- technology, transport, media, medicine and finance -- are increasingly defined by the word 'free'. Whereas Wal-Mart, the world's largest retailer, promises 'everyday low prices,' entrepreneurs and ultra-competitive incumbents develop business models predicated on providing more for free. It is a difficult proposition to beat."

If that isn't enough change for you, the brilliant and often-accurate technology forecaster Ray Kurzweil says that by 2020 we'll start to see the merger of computer and human intelligence, which will eventually enable people to live forever. Kurzweil's book, The Singularity Is Near, forecasts that by the late 2020s, nanobots the size of blood cells will travel through your bloodstream, fixing diseased or aging organs. By the late 2030s, computers will back up human memories. Around the same time, scientists will transform your skin cells into young versions of other cell types, then grow those cells into new, young organs, and transplant them to rejuvenate your body to stay eternally young and healthy. Or they may just infuse the new cells and let them find and rejuvenate the organ they are targeting. If you can make it another 15 to 30 years, you have a good chance of living forever. Before that great day, Kurzweil says the common cold will be history within 10 years.

By 2045, collective computer intelligence will be one billion times as much as total human intelligence today, and computers will design and manufacture their own upgrades -- no human will be able to understand exactly what is going on. Technological progress in the 21st century will be about 1,000 times as much as that in the 20th century. By the early 2020s, instead of making a cell phone call we will "meet" someone in a virtual world, take a walk with them in a virtual park and talk. Conference "calls" will turn into virtual meetings in places like Maui, or maybe a factory in Thailand that is the subject of the call. When you are walking down the street and see someone you've met before, their name and background info will be projected on your retina. Retinal projection will replace CRT and LCD computer displays and TVs.

Whether it's taking place in a laboratory or someone's garage, the drive for new technology is already in gear and the groundwork is being laid. And while I know that many of these innovations are years away, there are still plenty of interesting products and opportunities out there right now. Some are even the most popular items on store shelves. So, in next week's issue, I'm going to talk about the hottest technology gifts for this holiday season -- some widely known, and some surprises. That's an issue I'll be able to write every year for the rest of this century, and if Kurzweil is correct, I'll be around to write it and there will be no shortage of MegaShifts for us to invest in -- ever.

Until those technologies develop, we'll continue to profit from innovation and news events in our present-day MegaShifts.

From Michael Murphy.

Where are we going?

Global-Population: (2006 Est.) 6,499,697,060

% Population (Penetration) 16.6 %

Internet Usage, Latest Data: 1,076,203,987

Usage Growth: 2000-2006 198.1 %

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