Based on a recently proposed non-equilibrium mechanism for spatial pattern formation [cond-mat/0312366] we study how morphogenesis can be controlled by locally coupled discrete dynamical networks, similar to gene regulation networks of cells in a developing multicellular organism. As an example we study the developmental problem of domain formation and proportion regulation in the presence of noise and cell flow. We find that networks that solve this task exhibit a hierarchical structure of information processing and are of similar complexity as developmental circuits of living cells. A further focus of this paper is a detailed study of noise-induced dynamics, which is a major ingredient of the control dynamics in the developmental network model. A master equation for domain boundary readjustments is formulated and solved for the continuum limit. Evidence for a first order phase transition in equilibrium domain size at vanishing noise is given by finite size scaling. A second order phase transition at increased cell flow is studied in a mean field approximation. Finally, we discuss potential applications.
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