I feel if we look at any economy then they will be a population distribution where technical capability falls into a set percentile, if graphed then we will see the bell curve. Some economies might have for example 100,000 individuals in the 99th percentile while others might have 200,000 individuals with the same technical skills.
If a firm only has enough resources to hire local/technical capable individuals of the 50th percentile, finds an offer that will result in 60% saving by off shoring and ends up hiring individuals that fall into the 20th percentile, then yes money will be saved but service would be gone. However, if the same firm found an offer that resulted in a 1% saving but individuals were of an equal capacity or higher, that's when things work out, complicated yes, but definitely possible if done right.
Countries that have developed economies are all trying to get these savings. Recently, I have seen France and Germany (among many others) reach out to South Asia and elsewhere, Germany's Ambassador even said that for every $1 earned by export, 60 cents where from importing services and material. Firms in an economy are also competing to get their hands on cost efficient products and services. If everything is ignored then the business next door or the country next door will continue to be better off.