The problem is not that India doesn't have good developers, they do of course. The problem is that the average is brought down by the fact that a lot of people are only getting into IT because it is their best chance at living a middle-class life, not because its something they're interested in, and the volume business model of Indian outsourcing companies. Combine that with the "just do what you're told" mentality and its not a good deal, or only for certain projects.

The problems with southern Europe are similar. Hierarchical business culture, placing high value on keeping appearances, different work-life-balance mindset. Some countries produce world-class software that people around the world use, some don't, and its not hard to see why. Its not coincidence.