Innovations have acquired a key role in the growth and competition strategies of firms today. They are regarded as an essential tool for stimulating growth and enabling firms to master the competition brought about by the forces of globalization. However, in particular, many small and medium-sized enterprises (SMEs) in Western countries are facing insurmaintable barriers to innovation. To what extent might the concept of global innovation and, more specifically, the internationalization of research and development (R&D) be an answer to deal with these problems, is discussed in this paper. Based on empirical studies conducted by the authors in Germany, the paper presents results from research-in-progress and proposes a reference model for chances and challenges of global innovation activities.