The changes to Finland’s welfare state challenge rural communities’ welfare and well-being in many ways. Several rural communities have developed innovative solutions to meet locally identified needs as an alternative to the current policy. Based on the results of empirical research using both qualitative and quantitative data, Kattilakoski and Rantamäki review what rural social innovations consist of, how the public sector has influenced their emergence and what they reveal about the changing relationship between the welfare state and rural local communities. The theoretical framework used is the theory of rural local welfare systems (RuralLWS). The results show that the public sector sets both positive and negative incentives for the innovative activities of local communities through its own activities.