Difficulties and problems of business education are theoretically considered in the article. The advantages of traditional Western business education and the problems of young managers that are not ready for business activity in the environment of developing markets are highlighted. Methods of research. The author has examined the conditions of business education in Russia, its content and approaches to teaching. In the course of research, the author provides the idea that the solution to the problem of business education is based on innovation of the curriculum, implementation of interactive methods of teaching and creating the atmosphere of cross-cultural communication in the groups of MSc. students. Results of research. It is defined that setting up an innovative MSc. Program completely taught in English to multinational groups of students created cross-cultural environment in class. The curriculum has comprised the components of Russian and Western business school tracks. It is defined that the implementation of innovative methodological approaches to teaching based on modeling of manager’s professional activity is an indispensable educational means of creating the skills demanded. The author demonstrates the advantages of Markstrat simulation game in teaching marketing. It is proved that innovative business simulation helps to create the situation of authentic communication in the classroom, boosts teambuilding and provides practice of decision-making techniques. The author proves that the hypothesis of the article is correct and the way to solve the problem of business education is found.