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