OfficeTiger workers in Chennai do the work, then ship it back to the USA over the Internet for a fraction of the cost if done in the USA. [Randy Altschuler] wouldn't disclose wage rates in India. But he didn't dispute VC estimates that labor costs there are often one-fifth those in the USA.

Coradiant employs 30 workers in Montreal doing research and development. Labor in Canada costs 70% of the U.S. rate, [Mike Chuli] says. It's even cheaper in Russia, Romania and India. Highly skilled software developers in India earn as much as $3,000 a month vs. as much as $15,000 in the USA, says [Nick Sturiale], the venture-capital executive. Lower overhead keeps prices low so start-ups can better compete for business from tightfisted buyers. Annual corporate tech spending is expected to rise as little as 3% this year, about the same as last year, Goldman Sachs says.

To be sure, many young U.S. tech companies, including micro- multinationals, also create jobs in the USA. Among the software start-ups studied by USA TODAY, more than 80% of their combined 5,300 jobs are in the USA.