Social Innovation (SI) is understood as disruptive socio-political processes that attend basic needs and improve quality of life. SI is the manifestation of resistance to exclusion mechanisms. These inclusion efforts have the challenge fo transcending benevolent actions into long-term social change. SI in the labour market is studied in Malmö and Medellín using the C.S.I analytical framework examining their socio-political Context, Strategies for social inclusion, and labour inclusion Initiatives. This research produced two theses. (1) The transformative potential of initiatives is more complex than the vehement advocacy for scaling up/out suggests. It resides on their capacity to recognise and attend causes of exclusion, their SI features, and their development on a three-stage evolution path constructed here. (2) A re-examination of urban governance relations suggests the consideration of a fourth element, which devises the link between SI and peacebuilding. The study shows how the urban context is fundamental in determining these outcomes.