In general, governments try to do a couple things in regard to these two things. First, they typically try to promote competition (at least in capitalist countries). Second, they try to help encourage the development of new technology.
The controversy arises because it is not clear how much to encourage competition and how to encourage the development of new technology. For example, in the United States, should the government encourage greener technology by giving subsidies to green companies? That's what liberals would do. But conservatives would give tax breaks to companies in general and let the market decide which technologies make the most sense.
Policy making by Government refers tot he general direction or approach of the government to various national tasks and problems facing a country. This is a good approach for effective management and working of any big organization whether it is a business firm or a country.
Government policies provide a guidance and direction to the people at all levels in the government of the direction in which the government and the country will puts its efforts. It reduces the policy of different people and department within the government working at cross purposes.
It also helps the government to plan develop detailed programs, projects, and other activities designed to implement the policies. It also helps the government to formulate and implement required laws, rules and regulations.
Declaration of policies also helps the public to take people in confidence, and obtain their support. It enables people to know what they can expect from the government in future, and thus plan their personal business and private life better. Declaration of policies may also serve as warning and deterrent to some people who may otherwise tend to act against the interest of people.