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Purpose - The purpose of this paper is to analyse innovations in education from the point of view of product content and markets selected. Emerging market economies face a number of problems many of which are closely linked to and dependent upon the effectiveness of higher professional education. External environment changes, such as the formation of knowledge economy, globalisation, changes in the educational needs of consumers as well as new technological advances and growing competition require a different scale of innovations in higher education. Design/methodology/approach - The authors provide research results generated by three waves of expert interviews and several surveys. Findings - Economies in transition set special and very challenging tasks to the higher education system. It needs to be flexible enough to provide high quality services to meet the changing needs of a transition economy and still be able to carry our its social and humanitarian functions. A strategic marketing approach can be useful to implement the necessary transformations within higher education and develop innovations in the content and delivery of educational services to satisfy a variety of stakeholders of a university and facilitate positive developments in the society. Research limitations/implications - There is a gap between how universities perceive their main functions in a transition economy and what government and society expects from them. Practical implications - Export of education and other forms of internationalisation are very important for universities in transition economies. Unless linked to the university development strategy, internationalisation has little impact on the programmes' quality and will remain elite in character. Originality/value - The paper combines conceptual issues (such as educational service definition) and practical aspects such as new competencies needed, transformation management and internationalisation strategy development all linked together by the needs of transition economies.

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