I think overseas development will only be competitive when they start producing products for themselves. The main reason off-shoring fails is because of culture and communication differences.
(I'm not a world traveler, so disregard the next remarks if you have better insight than me.)
I noticed while working with chinese developers they were terrified to tell me they were having a problem with a task I assigned. They also had no problems passing extremely poorly designed code in order to meet a deadline. It didn't even have to work, the understanding was, you just have to turn something in before the deadline. I had a developer that couldn't get writes to the database working consistently. So he wrote them to a file on disk... I guess that was good enough.
Working with Indian developers is a much more mixed experience. Aside from them interrupting you constantly, which I cannot stand, some of their attitudes were downright laughable. "I have 5 years experience, which is about 10 American years experience" one guy told me as he explained that it would be better to write their own messaging layer instead of my selection of ActiveMQ.
Anyway, if Twitter/Google/whatever was based in India or China, I imagine the leaders would know how to use their labor effectively to produce competitive companies. I don't see American companies ever using overseas labor effectively. The cultures are just inherently incompatible for working on a subjective task like software development.
(I'm not a world traveler, so disregard the next remarks if you have better insight than me.)
I noticed while working with chinese developers they were terrified to tell me they were having a problem with a task I assigned. They also had no problems passing extremely poorly designed code in order to meet a deadline. It didn't even have to work, the understanding was, you just have to turn something in before the deadline. I had a developer that couldn't get writes to the database working consistently. So he wrote them to a file on disk... I guess that was good enough.
Working with Indian developers is a much more mixed experience. Aside from them interrupting you constantly, which I cannot stand, some of their attitudes were downright laughable. "I have 5 years experience, which is about 10 American years experience" one guy told me as he explained that it would be better to write their own messaging layer instead of my selection of ActiveMQ.
Anyway, if Twitter/Google/whatever was based in India or China, I imagine the leaders would know how to use their labor effectively to produce competitive companies. I don't see American companies ever using overseas labor effectively. The cultures are just inherently incompatible for working on a subjective task like software development.