Actually, it still happens the same way in the USA as well -- for physical products. The hardware side of physical products is often well-supported, with higher budgets for R&D and engineering salaries, while the software side of the physical products is expected to be done barebones and as an afterthought at the end of the product development cycle.

Software engineers in the US who do not work on physical products are highly paid, because they can potentially create nearly infinite return on investment with near-zero marginal product costs.

But software for widgets doesn't have that infinite margin ratio. So firmware suffers greatly. Think auto infotainment systems, smart-home electronics, appliance interfaces, point-of-sale kiosks, etc.