Handle with care. (From the Editor).

Canada's health care sector is an interesting dichotomy of burgeoning industry and cash-strapped care. I use health care here in the broadest possible sense to include the biotech/pharmaceutical industry because it demonstrates such an interesting contrast in corporate experiences.

Big pharma and small biotech firms proved to be the next big thing after the sheen of dot coms faded. Indeed, the biotech market has attracted substantial venture capital investment and has thrived in Quebec and Ontario. Although the venture capital has dried up substantially, many of these firms are now buttressed for future growth on their own terms. Meanwhile, big pharma faces the challenge of maintaining its market share while wrestling with patent expirations and greater competition from generic shops. In "The biotech boom builders," John Cooper talks to CMAs involved in both of these changing markets.

We also talked to a number of CMAs involved at the other end of the health care spectrum--hospital management. With the release of the Romanow Report in late 2002, the serious funding shortfall for the essential services these institutions provide was laid bare. More money is needed for the provinces to manage these facilities effectively and efficiently--and sooner rather than later.

Many hospitals have been cash-strapped for years, of course, and hospital administrators have had to put an ounce of creativity into their usual management mix. Our Management Trends column this month offers insight into how some administrators have managed to get by. In another feature, Etienne Poulin, CMA, offers one approach to improving the sector for the long term--improving hospital logistics management.

Financial creativity, of course, is essential in any business to a certain extent. Every company must come up with ways to meet their prospective targets for the financial year or to accurately meet the budget set at the beginning of the year. A growing number of people, however, are dissatisfied with their budgeting systems.

The case against traditional budgeting has been systematically investigated and reported upon by a European think tank known as the Beyond Budgeting Roundtable (BBRT)--a program of the Consortium for Advanced Manufacturing. Their argument against traditional budgeting follows from the fact that firms today need to be more flexible and responsive to deal with unpredictable change, hyper-competition, and increasingly fickle customers. In a two-part series, Theresa Libby and R. Murray Lindsay, CMA, explain why budgeting has lost its pride of place and what the BBRT suggests putting in its place. Libby and Lindsay are currently involved in a study of budgeting practices in North America and invite you to participate. See the first part of "Budgeting--an unnecessary evil," on page XX for details.

Robert Colman

Editor-in-Chief