Via Ned Batchelder, check out Darwin in a Box.
The idea is called a genetic algorithm. It creates a random population of potential solutions, then tests each one for success, selecting the best of the batch to pass on their "genes" to the next generation, including slight mutations to introduce variation. The process is repeated until the program evolves a workable solution. Originally developed in the 1960s by John Holland at the University of Michigan, genetic algorithms are increasingly being harnessed for real-world tasks such as designing more efficient refrigerators.
Gross believes genetic algorithms have the potential to revolutionize engineering. Instead of using software as merely a visualization tool that helps draw a contraption, he envisions genetic algorithms that can handle the entire design process. You define your organism, your genes, and your fitness function and let the software do the hard work of actually figuring it out.
Check out the demo video they have of a genetic algorithm getting some legs and a torso to walk. Pretty fascinating.
While of course I don't think doing engineering using genetic algorithms is much like evolution at all, I think it's totally fascinating, and I agree that it will probably be very useful in helping to find solutions to engineering problems.
Note to self: If I ever get a masters, genetic algorithms might be a neat idea to do a thesis on... hmmm...
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