Is there some middle ground between these the definitions of LOCAL ECONOMIC DEVELOPMENT ? Definitely. Different theories of local economic development may may define LED at or between these two extremes.
Theories of LED
Neoclassical theory sees development as increasing economic growth per capita. Straight up, money matters. Adam Smith and the invisible hand, David Ricardo and comparative advantage....
Policies of free trade and market deregulation exemplify the influence of this theory.
EXAMPLE: Resistance of governments, including the Waterloo Regional Municipality, to implement living wage or beef up minimum wage regulations, for fear that too much regulation will detract big box stores like Walmart or Target.
Export/economic base sees development as increasing output, income and employment. It's a little more holisitic than neoclassical theory, but not by much. It focuses on the importance of trade. The goal is for a region to export more than it imports.
Policies of the export/economic base concept include: industrial recruitment (running after industries), infrastructure building, and import substitution.
EXAMPLE: Smokestack chasing - Sudbury
Growth pole is another Keynesian-inspired concept. It says that some industries can be particularly helpful for growth - a propulsive industry that diffuses wealth to the rest of economy. Evidence of this phenomenon is evidence of development.
Policies: choosing a winner and investing.
EXAMPLE: Blackberry for Waterloo.... used to be.
Product/profit cycle: This came out the political economy of the 70s. Main thinkers here were Kondratiev (Capitalism happens in 50-60 year cycles! Observe it in prices, interest rates, and economic variables, dudes!) and Joseph Schumpeter (innovation and technology change are where it's at! First entrepreneurs and then large firms). Economic development based on ability to produce new products.
Close-knit ties between different kinds of firms to specialize in a cluster. Unique cultural identity is important
EXAMPLE: Kitchener trying to create a culture around their specialization - with culture and music. Contrast with Silicon Valley