Definately cheaper.. better job is another story.
It really depends on whom you go to. 'Cheap labor' brings with it connotations of sweatshops where people work awful hours and do a passable job. But that's not necessarily the rule; if you pay peanuts, you do get monkeys, and that applies in India, Phillipines, China or Africa. I'm sure people have anecdotes about Indian offshorers who did a pathetic job of whatever they were contracted to do. Yes, not every Indian coder is John Carmack or Linus Torvalds, and not every company is Wipro or Infosys.
Rhetoric apart, here are some hard facts on the number of software companies with the highest software quality ratings - SEI/CMM level 4 and 5 from Carnegie Mellon University (my alma mater, coincidentally):
Country | # of Level 4 orgs | # of level 5 orgs
India 27 50
USA 39 20
China 0 2
Canada 0 1
Russia 0 1
Australia 2 0
France 1 0
Ireland 1 0
Israel 1 0
Singapore 1 0
Yes, these are subjective, but the SEI capability maturity model is the best known indicator of software development process maturity, andthey're an indication of how many software companies in India have mastered extremely high levels of competence in the software development process. I count myself fortunate to have worked in one of the CMM Level 5 rated companies in Bangalore, and have had a firsthand view of how well organized it all is.
Subjective statistics apart, the IT
/BPO sector is growing at ~30-40% per annum now, with the biotech/pharma sector growing at an even more hectic 65%. IT
is a $15 billion industry now, and is slated to grow to $55-60billion in another 4 years. Companies would be foolish to offshore to India to such a massive extent if they didn't feel they'd get a proper job done to commensurate for lower costs. The numbers speak for themselves. TCS has $1 billion in sales, while Infosys and Wipro will both hit that level this year. All three of them will probably breach the $5-10 billion mark by the end of the decade.
Software isn't the only area - Intel is moving part of their Xeon microprocessor design work to Bangalore, as are IBM, Sun, nVidia, Synopsys, Cadence, Motorola, and a host of others. Take a peek in the economics sections of Indian dailies and hardly a week passes without a blurb about yet another company hiring a few thousand more. You'd be making a mistake to assume that India's only USP is low cost; there are more than enough examples to show you can get low cost+high quality - you just have to go to the right guys.
The bottomline, as Bobrayner pointed out, is that this is all just capitalism and free trade in operation.
I do however think they are a sponsor of really bad food.
Eh ? Well, you can stick to your artery-clogging burgers and fries then