I see your point, but...
The cases you describe makes it sound even more risky to outsource overseas. In these cases, the people hiring the outsourcing firms would be far easier to take advantage of due to the lack of internal benchmarks and expertise. Therefore, their preference should be along the path you questioned (e.g. same province/state -> country -> region). There is nothing wrong with outsourcing to your neighbouring country if you cannot find the talent in your own backyard. However, with the unemployment rates the way they are I find that incredibly hard to believe. I meet so many ex-IT professionals that were displaced from the field and are now doing something completely different.
