The date is a secret, but sometime soon a rocket is scheduled to lift several nearly identical satellites into low-Earth orbit. The event is remarkable, even historic, for two reasons. The first is what the satellites will do. As part of 131 satellites set to be orbiting within a year — 28 are already up and working — they will photograph the entire planet every day and send the photos back to Earth. Nothing remotely like that has ever been done before. The second remarkable feature of this project is that all those satellites are built by a small firm called Planet Labs from easily available off-the-shelf components such as laptop batteries and smartphone chips. The satellites, each slightly larger than a shoebox, therefore cost a small fraction of the many millions of dollars that satellites have cost in the past. Planet Labs won’t disclose numbers, but a five-figure-per-satellite range would be a safe guess. This potentially revolutionary venture, until recently the sort of project that only governments could contemplate, is instead the creation of a 40-person startup.
We’ve entered the era of Lego innovation, when highly valuable and significant advances in technology are achieved by imaginatively combining components and software available to everyone. It’s happening now because the relentless working of Moore’s law is producing cheap everyday technology that is awesomely powerful. The first microprocessor in 1971 had 2,300 transistors, only enough to run a simple four-function calculator. But continual biannual doublings have produced a current top-end processor packing 5 billion transistors (see chart), equal to, say, 250 of the Apple G3 desktop computers that many of us were using in 2001. All on a chip the size of your thumbnail.
Thus we see something new: companies, medical researchers, governments, and others creating breakthrough technology products without having to create any new technology.
MIT’s Media Lab is creating robots powered by Android smartphones. After all, those devices can see, hear, recognize speech, and talk; they know where they are, how they’re oriented, and how fast they’re moving; through apps and an Internet connection they can do a nearly infinite number of other tasks, such as recognize faces and translate languages. Teams at the University of South Carolina combined off-the-shelf eye-tracking technology with simple software they wrote to detect whether a driver was getting drowsy; any modern car carries enough computing power to handle the job easily.
The U.S. military deployed more than 4,000 PackBot robots in Iraq and Afghanistan, mostly for bomb disposal. They’re made by iRobot, best known for its Roomba vacuum cleaner. Researchers are using Emotiv’s EPOC wireless neuro-headset (off-the-shelf price: $299) to let severely injured people control an electric wheelchair or operate a keyboard with their thoughts, life-changing advances that were fantasy a few years ago.
In a twist on the same theme, WhatsApp, the messaging service recently bought by Facebook for $19 billion, is a “technology” company that required no new technology. Instead, it created huge value through software that harnesses existing tools: the Internet, Internet service providers, and mobile phones. WhatsApp could never have achieved such success in a less developed tech environment. The same is true of many of today’s hottest outfits — like Twitter, Instagram, Pinterest, and Facebook itself.
None of that suggests that fundamental technology advances are less important or valuable than before. The enormously expensive work of continuing to double transistor counts on chips still pays off. Thousands of companies are working on new technologies in biotech, materials science, and energy generation and storage, all of which the world needs and will pay for.
What’s new is the opportunity to do great things simply through superior imagination in a world of unprecedented technological power. In the era of Lego innovation, we all have access to a really big box of plastic bricks. The contest is to see who can use them in the coolest possible way.
This story is from the April 28, 2014 issue of Fortune.