The concept of "knowledge-based economy" (KBE) has gained considerable popularity in Taiwan. With the new government led by President Chen Shui-bian planning to develop Taiwan into a "green silicon island", policies for the development of KBE projects are also being proposed. Although the idea of a KBE is well known and well planned by the government, its concept and definitions are not at all clear. Observing the government's policies and experts' input on the subject of KBE, it is significant to note that the roles of technology and skills progression have both been emphasized. Such emphasis should channel social resources into technical knowledge and technological progress. Can the target of economic growth be achieved in this way? And even if it is achieved, are the benefits greater than the costs? What's more, does the process lead to "sustainable growth"? Each of these questions are discussed in this paper. First of all, the meaning of a "knowledge-based economy" has to be clarified. Then, the "quantitative" contribution of KBE and technology to economic growth are measured using the general methods discussed in the literature. In discussing the concept of technology and sustainable growth, the general concept and policy of KBE is reviewed and the possibility of a negative tilt is explained. Finally, it is suggested that "trust" is the key to a successful KBE. Compassion and self-examination are both neglected in the current development of KBE projects led by the government.