Not to get lost in semantics, but the US is technically 'first world'. Remember, we are 'new world'. Nobody ever refers to the 'second world', but they am us.

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IMHO the problem with hiring unseen developers in unknown places for development work in the US is that they lack a critical component - actually, two.

One is a firm grasp of American language nuances. Yes, their English may be technically perfect, but it lacks the flavor and understanding of business in particular and society in general in the US. This can be a big handicap when trying to explain system needs and design requirements.

Secondly, very few of them have actual business experience. They are code jockeys, nothing more. We could do as well (for not a lot more) by hiring high-school and college kids. In my opinion - and it is flavored by many years in the trenches - is that truly effective developers understand at least a little of the business that they are developing tools for. They need to understand the audience - the users - as well.

The march of programming jobs overseas is driven by accountants and CEO/CIO's with no real understanding of what it takes to create effective software solutions. Someday this is going to backfire on them, and take down a lot of otherwise good companies with it. I know of one on the ropes already because of myoptic IT practices and technophobic management.

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