(FORTUNE Small Business) – It's never easy to forecast the future. Consider the U.S. Department of Labor's rosy proclamation in 1929 that "1930 will be a splendid employment year." Or Secretary of State John Foster Dulles's 1954 decree that the Japanese would never produce anything that an American would buy. Or, more recently, just about everyone's slam-dunk opinion that Enron offered a new model for how companies should operate. But for all the risks of trying to predict the future, you can increase your odds by thinking small, as in small business. From Oliver Evans's 1805 invention of refrigeration to the Wright brothers' first flight nearly 100 years later to Marc Andreessen's development of the Netscape Internet browser almost 100 years after that, entrepreneurs' innovations have consistently formed the primal soup of progress. That trend is only becoming more powerful. According to consulting firm CHI Research of Haddon Heights, N.J., small firms now represent more than 40% of America's highly innovative companies (defined as those with more than 15 patents filed in the previous five years), up from 33% in 2000.

In this issue we set out to identify the products, people, and ideas likely to make news in 2005. Our findings include an inventor who has developed 200 new kinds of fruit (with three more appearing soon), a firm that uses DNA to protect intellectual property, and a submarine engineer with a vision for an underwater hotel. These are the fervid imaginations and small (for now) businesses that are shaping the future—today. —TAHL RAZ