Technology & Trade

Growing Commercial Potential

in Program

Over the past decade, drones have been increasingly relied upon in a growing number of strategic theaters by the United States as well as by other countries. The lethal use of drones is not well understood and evokes a backlash due to secrecy, primarily with regard to their use as a counter-terrorism tool, used for targeted killings that have led to the deaths of innocent civilians. Commercial use of drones, which is also growing in popularity, is also often viewed skeptically and, for many, raises concerns of a loss of privacy and dangers to safety.

Yet, despite suspicion and concern over drone technology, commercial applications continue to rise, and the rapid technology innovation opens significant opportunities across a variety of sectors. Non-military uses of drones are vast and the commercial market for drones is already driving innovation, both in the United States and abroad. Commercial drones are used in an array of applications, ranging from pipeline monitoring, cell tower inspections and damage assessment, to real estate photography, movie filming, and even expedited package delivery. To date, in the United States alone, the FAA has granted more than975 companies permission to use commercial drones – with many being used for real estate, photography and filming, as well as agriculture and manufacturing. And while drones are most recognized in the aerial sphere, there is increasing research and development of unmanned ground and underwater systems. These current and future uses and applications mean there is a market for commercial research and development that far outpaces those restricted to military applications.

The economics of the commercial drone industry are staggering. A recent study by a drone trade association concluded that the total economic impact of allowing widespread commercial use of drones in American airspace would be about $82 billion between 2015 and 2025. Other studies have projected that the global market for drones could grow to over $8 billion annually by 2018 and nearly $12 billion by 2023. Experts estimate that the drones market will create 104,000 new jobs in the next ten years. Even if these estimates prove overly optimistic, drones will continue to constitute a large and growing industry with increasing commercial applications in the coming years.

To date, drone innovation has far out-paced the development and implementation of appropriate regulations to govern their use – including to address privacy and safety concerns – and eventual integration into the national airspace. In the long term, efficient regulations focused on safety and personal and national security should support commercial drone innovation. Industry has a significant opportunity to contribute to this process as the technology develops. Industry can influence the development of government regulations and undertake self-regulation measures to demonstrate a commitment to privacy and safety concerns. All stakeholders in the commercial drones industry – including vendors, operators, and supporting organizations – can ensure that future policies safeguard national security interests and promote responsible drone development and use. Industry involvement in the development of regulatory regimes is crucial in order to avoid the tangible costs of noncompliance as well as prevent unlawful proliferation and protect intellectual property.

To date, the multitude of issues faced by the FAA in completing its drone regulations and the extremely slow pace of their efforts – as well as the inability of Congress to effectively act within the partisan atmosphere of Washington – has created a somewhat hostile environment to commercial drone innovation in the United States. Thus, much of the innovation is taking place outside of the United States, as European companies are leading the industry on civilian drone development and leaving U.S. companies to catch up. Although the FAA is trying to mitigate the impact of the slow regulatory process via exemptions for use, it is not enough to rely on these stop-gap measures to foster commercial drone innovation, growth, and competitiveness. Commercial development in the United States will only flourish if and when they are successfully integrated into American airspace, the American public becomes more comfortable with the reality that drones are here to stay, and when regulations allow for widespread, safe, and accountable use of drones. 

This piece originally ran in The Cipher Brief on September 21st, 2015

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