Unfortunately, this quote is often taken out of context to argue that optimization is not important. Here's the full quote:
Programmers waste enormous amounts of time thinking about, or worrying about, the speed of noncritical parts of their programs, and these attempts at efficiency actually have a strong negative impact when debugging and maintenance are considered. We should forget about small efficiencies, say about 97% of the time: premature optimization is the root of all evil. Yet we should not pass up our opportunities in that critical 3%.
In other words, you should optimize your code after you have profiled your program to find out which sections are most performance-sensitive, and you should use benchmarks to verify that the optimizations you have applied are beneficial.