Social innovation, being a concept on the rise for the last decades, has entered both the research and the policy agendas. In the times of neoliberalism, austerity and state withdrawal, social innovation is called upon as one of the tools that helps local communities to utilise their (entrepreneurial) potential in order to address the gaps in e.g. rural service provision and become an active agent in the process of rural development. Aiming at addressing local challenges and increasing participation and decision-making, social innovation shares some common traits with the idea of neo-endogenous development that builds upon local resources and knowledge while connecting it to the wider contexts. By investigating the case of the Muehlviertel region, the paper seeks to analyse the interconnections between social innovation and neo-endogenous development. Drawing from the empirical data, the paper concludes that the processes of SI strongly build upon neo-endogenous approach to the region’s development, creating region-wide multi-stakeholder networks, in which the bottom-up activities are supported and nourished. However, the paper also points out some pitfalls that the regional actors face when implementing SI, ranging from bureaucratic burdens to some resistance towards innovation.