Are trillions of dollars at risk if the UAV industry fails to take off stateside?
By Casey Nobile
April 16, 2013
We know that the civilian UAV debates in this country occupy a stage at least as expansive as the U.S. national airspace (NAS) and the six states destined to be designated official UAV test sites. The players range from industry giants Boeing, Lockheed Martin and AeroVironment to well-financed organizations such as the FAA, AUVSI and the ACLU to local sheriff departments, business owners and private citizens. What are less clear are the rules.
While Congress focuses on debating weaponized drone use, legislators in over 30 states have introduced bills—mostly centered on privacy infringement in the context of law enforcement—to restrict the use of civilian UAVs with mixed results. Charlottesville, VA became the first city in the United States to formally pass an anti-drone resolution, calling on the U.S. Congress and the Commonwealth of Virginia to adopt legislation prohibiting information obtained from the domestic use of drones from being introduced into a Federal or State Court; Florida’s Freedom from Unwarranted Surveillance Act (SB92) and Illinois’ Freedom from Drone Surveillance Act (SB1587) also passed full State Senate votes. Meanwhile, a bill that would have restricted domestic drone use in Washington State never even made it to a floor vote.
Understandably, there is a great deal of market uncertainty generated by the UAV debates and a great deal of importance placed on their outcomes. In a broad sense, they attract global conjecturing as to whether the U.S. will become a significant civilian UAV manufacturer and exporter. Cinched defense spending has caused large UAV manufacturers like AeroVironment and Raytheon to target more civilian applications. In the meantime, small UAV start-ups with unique applications are losing investors, capital and patience waiting for the FAA to establish a clear path to certification.
“The U.S. has been at the lead of this technology a long time. If our government holds back this technology, there’s the freedom to move elsewhere ... and all of a sudden these things will be flying everywhere else and competing with us,” says Robert Fitzgerald, CEO of the BOSH Group of Newport News, Va., which provides support services to drone users.
In the simplest terms, UAVs can significantly reduce costs by taking over jobs already performed by manned aircraft such as crop dusting, aerial surveillance and transporting freight.
In the case of public safety, for instance, a UAV costing $30-40,000 can now provide the same surveillance capabilities as a $500,000 police chopper (which costs an additional $250 per hour to operate). Additionally, the unmanned vehicles can be launched very quickly and from almost any location.
In Mesa County, Colo., the police department has already used its UAV to find missing people, conduct an aerial landfill survey and assist first responders in subduing a church fire.
“It’s the Wal-Mart version of what we’d normally get at Saks Fifth Avenue,” Benjamin Miller, who leads the UAV program for Mesa County’s police department, told NBC.
In other application areas, including highway and bridge inspection, extreme sports photography/videography and environmental monitoring, low-cost aerial devices hold vast potential. They can collect better data, fly closer to their targets and enter potentially hazardous areas without risking human lives.
Chris Anderson, chief executive of 3D Robotics, which makes small, inexpensive UAVs using many components commonly found in smart phones, sells more civilian UAVs every six months than the entire drone fleet of the U.S. military, which numbers about 7,000 aircraft. The UAV maker has made notable progress in creating software and hardware that will allow these devices to be used in applications where they previously would have encountered limitations.
A recent report, commissioned by AUVSI and titled The Economic Impact of Unmanned Aircraft Systems Integration in the United States, identifies public safety and precision agriculture as the most profitable near-term applications, comprising approximately 90% of the known potential markets.
The report projects that, if allowed, the integration of UAVs into the NAS will total more than $13.6 billion and create more than 70,000 new jobs in the first three years. By 2025 job creation is estimated to reach almost 104,000. According to Darryl Jenkins, an airline analyst who co-authored the report, this market growth is expected to increase dramatically for the first five years and then level off at a rate a tad faster than the GDP.
Authors of the report based their conclusions on the results of UAV adoption in other countries such as Japan—where 90 percent of crop spraying is done by UAVs—as well as surveys, land ratios and rates of adoption of new technology in general. The findings focus on small to medium sized UAVs in the $30-40,000 range.
While it’s certain that early talks regarding regulations are necessary to protect the public from falling victim to policy by procurement, those states who implement strict anti-drone regulations risk excluding themselves from the higher paying manufacturing jobs and tax revenues expected to be generated by the new industry. In Virginia, for example, the state General Assembly passed a bill that would place a two-year moratorium on the use of UAVs by state and local law enforcement.
“…states that create favorable regulatory and business environments for the industry and the technology will likely siphon jobs away from states that do not,” warns the report.
More compelling still is this statistical wake-up call: “The United States loses $27.6 million in potential economic impact every day that integration is delayed”—that’s $10 billion per year.