So for instance, in Basingstoke, an area where land is cheap just outside London, Sony, Huawei, and ST Ericcson (semiconductor major), all do high grade R&D work. Friends that work for those companies tell me that the work is run from a head office in America, Japan, or China, but done in the UK because of good IP laws, and lower cost workers than in Japan or America.

Similarly, AMD have a huge R&D presence in India, and a lot of foreign talent is willing to relocate there because although wages are lower than in the US, they can enjoy a very high standard of living.

I think the outsourcing you are talking about (small, non IT business buys a custom warehouse management system, programmed as s service), has little resemblance to the actual movement of jobs within large companies that I discuss.

This (movement for whatever reason) has happened to whole industries. The UK used to be a center for semiconductor manufacture, but lost that status for 2 reasons. One was a series of catastrophic strategic decisions at UK semiconductor companies. But the other was that the UK government stopped giving tax breaks to the same extent, and were outbid by Singapore, which was willing to provide tax breaks, infrastructure, and an easy ride through city planning.

The reason semiconductors moved was that the industry involve huge capital investments, and would make them where the deal was best (otherwise they would be outcompeted by a company that got a better deal).

In software, the primary cost is definitely wages, so I'd presume large companies will be very sensitive to wage prices, and go the place the trade off is best.