Europe has a high labor cost/tax structure compared to the United States. My company bid software work at a schedule and price that no European company could legally match. That was in 1998. An Indian company could have eaten our lunch with their much lower labor rates (comparing rates today). The Indian competition was not there in 1998. It is here now. The 15 engineers that implemented the 1998 contract are now spread all over the U.S. in new assignments. They can not economically compete from the San Diego office that was so viable in 1998.
BTW, an Indian company could kick our butts on labor rate today, but I seriously doubt they could beat us in the areas of quality and schedule. For short fuse projects, we can deliver the goods before the Indians can even figure out what is desired.
Thank you very much for you reply. Everything you said makes perfect sense. Here is something you may (or may not) find interesting. It is by an Ivy League professor (I believe) and an Indian who offered his opinion about India's education vis-a-vis innovation; i.e., the ability to be innovative. It ain't there, even in India's best universities -- you know, the ones that are suppose to make MIT look like a high school. "Free" traders feeeeeeeeeeel that way.
"Competitive exam mania. It’s the quality of education that suffers," by Pratap Bhanu Mehta http://www.tribuneindia.com/2003/20031201/edit.htm#5
Though not mentioned in the article this mania has led to much cheating. I always post googled articles about cheating (India universities cheating) whenever some nitwit writer opines that "they are better than us."
What you write hints at another poster's opinion that perhaps these offshored jobs (coming here) are here now but they are on their way to India, China, etc.