I love reading things like this where you stop and go "Huh, I think that is exactly correct." So the follow up to that thought is what is the fate of software? Specifically when people figured out that the value wasn't in having the factory, but in the final product + design, they outsourced all the factory work to where it was cheapest to get get done. I could see this becoming a huge business for a country with a relatively low cost of living but a large supply of very capable coders.
I mean this place you speak of already exists. It's called Bangalore :-) . Without IT it would be but a shadow of its current self. You can't walk down the street without running into a coder.
Both India & China are experiencing startup booms of their own and this is definitely having knock on effects on the developer eco systems here, though not enough of an effect to overcome the damage caused by a shoddy education system.
But even if the current Indian start up bubble bursts , there'll still be lot of really good devs on the market who're as good anyone else in the world and much cheaper. And thanks to Github and Stackoverflow the playing field is being levelled because it gives us access to the kind of peers and role models we may not find at our day jobs.
Beyond the stereotype of the shitty Indian coder and the outsourced mega IT projects gone horribly wrong , there are lots of smaller firms who do really good work but aren't really well known.
Also firms are coming up in the smaller Indian cities where the costs are dramatically lower. As our infrastructure improves these could take off in a big way.
I worked at a place where lots of startups outsourced their apps and it went well most of the time. Many people might be surprised to know that even Slack was developed by an external consulting agency (in the US not India).
The most recent companies funded Y Combinator seem to exist in the intersection between code and domain expertise in law, medicine, finance or other advanced industries. It seems to be harder to make it work with a "pure code" startup.
