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The paper discusses the PICO (program in, chip out) project, a long-range HP Labs research effort that aims to automate the design of optimized, application-specific computing systems - thus enabling the rapid and cost-effective design of custom chips when no adequately specialized, off-the-shelf design is available. PICO research takes a systematic approach to the hierarchical design of complex systems and advances technologies for automatically designing custom nonprogrammable accelerators and VLIW processors. While skeptics often assume that automated design must emulate human designers who invent new solutions to problems, PICO's approach is to automatically pick the most suitable designs from a well-engineered space of designs. Such automation of embedded computer design promises an era of yet more growth in the number and variety of innovative smart products by lowering the barriers of design time, designer availability, and design cost.