  We explain how hierarchical organization of biological systems emerges
naturally during evolution, through a transition in the units of individuality.
We will show how these transitions are the result of competing selective forces
operating at different levels of organization, each level having different
units of individuality. Such a transition represents a singular point in the
evolutionary process, which we will show corresponds to a phase transition in
the way information is encoded, with the formation of self-reinforcing
information bottlenecks. We present an abstract model for characterizing these
transitions that is quite general, applicable to many different versions of
such transitions. As a concrete example, we consider the transition to
multicellularity. Specifically, we study a stochastic model where isolated
communities of interacting individuals (e.g. cells) undergo a transition to
higher-order individuality (e.g. multicellularity). This transition is
indicated by the marked decrease in the number of cells utilized to generate
new communities from pre-existing ones. In this sense, the community begins to
reproduce as a whole via a decreasing number of cells. We show that the fitness
barrier to this transition is strongly reduced by horizontal gene transfer.
These features capture two of the most prominent aspects of the transition to
multicellularity: the evolution of a developmental process and reproduction
through a unicellular bottleneck.
