Malmö serves as an illustration of how urban governance arrangements provide structures for social innovations and where the city of Malmö could be categorized as an example of the governance of social challenges. This chapter contributes to the debate on social innovations by arguing that attention must be paid to the relationship between inertia, clearings in local contexts, and innovations in order to understand the underpinnings of social innovations in local welfare regimes. Specifically, in addition to describing the local welfare regime and a set of social innovations in the city of Malmö, the chapter analyses the different types of clearings that proved fertile for the development of the social innovations under study. Rather than arguing that social innovations come to the fore as a result of the quality of certain individuals or being locally and socially embedded, the authors put forth that innovations may also emerge in clearings as a consequence of inertia, in the case of Malmö in the shape and form of an unwillingness to change due to political and ideological factors.