Disadvantages Decline of innovation capabilities One of the main risks of manufacturing abroad would be the loss of the same product innovation capabilities and capabilities which would slowly lead to the decline of their advantage competitive. Pisano and Shih (2012a) argued that “mass migration of the manufacturing sector has seriously eroded the internal capabilities needed to transform inventions into high-quality, cost-competitive products…”. Looking at Kodak, in the 1960s and 1970s its profits came from selling color film and not cameras, so it allowed lenses, shutters and other mechanical components to close down while other Japanese companies like Canon, Nikon and Minolta took over color cameras film Instead. However, as the company sought to build its digital camera business, most of its components came from Asia: memory cards, rechargeable batteries, electronic sensors and the like. Kodak had lost the ability to manufacture and with it the ability to innovate crucial components of a camera. (Pisano 2012a) Naghavi and Ottaviano (2009) developed a model in which offshoring is associated with less feedback from the offshore production facility to the national innovation divisions and greater coordination problems that slowly lead to less product innovation . This is especially true in industries where research and development is cheap and product differentiation is strong. Fuchs and Kirchain (2005) also suggest that “static economies of offshore production…lead to dynamic diseconomies – in particular, disincentives for innovation.” Variety of Operational Risks Another disadvantage would be operational risks. There could always be the possibility of increased costs, over-dependence on one supplier, exploitation of knowledge transfer and even a decrease in the quality of goods... half of the paper... even development and places Working in the North American Garment Industry. Global Networks, (online) Volume 3, pages 143–69. Available at: http://onlinelibrary.wiley.com/doi/10.1111/1471-0374.00054/pdf (assessed as of April 25, 2014)38. Levy, D.L. (2005), Offshoring in the new global political economy. Journal of Management Studies, (online) Volume 42 Pages 685–693. Available at: http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6486.2005.00514.x/full 9assessed as of April 21, 2014)39. Storper, M. (1997). The regional world: territorial development in a global economy. London: Guildford Press.40. Waldman, A. (2004). “What India's upset vote reveals: High technology is superficial.” New York Times, (online) May 15, page 6. Available at: http://www.nytimes.com/2004/05/15/world/what-india-s-upset-vote-reveals-the-high- tech-is-skin-deep.html (rated April 23 2014)