This essay embraces a notion of critical scholarship concerned with proposing normative and actionable alternatives that can create more inclusive societies and focuses on the role of institutionalizing experimental places for inclusive social innovation as a bottom-up strategic response to welfare state reforms. By mobilizing the notions of utopias and heterotopias in Foucault, the paper sheds light on the opportunity to move from policy utopias to democratic heterotopias, discussing the politics embedded in this cognitive shift and the democratic nature of social innovation changing social and governance relations by interacting with politico-administrative systems. Some obstacles to institutionalizing social innovation are highlighted, as well as some key governance mechanisms that can be activated either by public and/or social purpose organizations to try to overcome those obstacles. Finally, we discuss the importance of linking inclusive social innovation with democratic, rather than market logics.