This meant it had to throw away the old doctrine of economic modernisation, namely "development by consuming the Earth", and find its own way for sustainable development.
"When science, technology and knowledge are employed to deliver a knowledge-based economy, we have to make sure that they are used for the benefit of, rather than at the expense of, sustainable development in Taiwan."
Dr Lee said one lesson to be learned from the Taiwan experience was that New Zealand must develop "an adequate path to a knowledge-based economy that can actually sustain its beautiful environment".
He said Taiwan had not yet transformed itself into a knowledge-based economy but it was heading in that direction.
"By changing the education system, initiating a lifelong learning system and encouraging closer cooperation between research institutes and business, we hope we can lay a solid foundation for a knowledge-based society in Taiwan."
Dr Lee abandoned his US citizenship after winning the Nobel Prize for Chemistry in 1986 and returned to Taiwan to become a key force in improving the country's education system. He was nominated as the country's Premier, but declined.
At the same conference session, Australia's chief scientist, Robin Batterham, outlined his country's experiences in innovation and creativity.
He advises the Australian Government on the contributions of science, technology and innovation to national goals and helps to ensure that investment in science and technology is beneficial.
His report The Chance to Change said that resources should be put into science, engineering and technology to spur the knowledge economy.
That prompted Prime Minister John Howard this year to announce a package - Backing Australia's Ability - involving $A3 billion ($3.72 billion) over five years to back Australian innovation.
The package aims to boost research, speed the commercial application of ideas and develop and retain skills.
Dr Batterham said the plan focused on connection, collaboration and excellence.
"But we've still got a way to go in quite a few areas," he said.
This included literacy and teaching and boosting research and development through tax concessions and venture capital.
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