Commercial Drones – How to Make this Industry Work in the U.S.

Communicating Effectively is about Community

The U.S. lags far behind the rest of the world in commercial drones and Unmanned Aircraft Systems (UAS). Countries like Japan, Australia and others have been using these tools commercially for more than five years in industries such as agriculture, insurance, construction, mining, film making and newsgathering, as well as to take people out of harm’s way in jobs like infrastructure inspection, disaster response and search and rescue operations. The sporting world has caught on, but ESPN just broadcast the 2nd annual National Drone Racing Championships in New York this August.

U.S.-based entrepreneurs have had to watch this space explode from the sidelines. Other countries are maturing in their use of commercial drones while we’ve let opportunities, that are too many to list here, slip by. It’s inconceivable that the U.S. would cede leadership in this space.

That’s finally beginning to change.

The numbers tell the story. Regardless of which research you subscribe to, the economic potential for commercial UAS is huge. Totals vary by organization: The Association for Unmanned Vehicle Systems International (AUVSI) predicts that during the first three years of commercial UAS integration into the National Airspace, more than 70,000 jobs will be created with an economic impact of $13.6 billion. PriceWaterhouseCoopers published a report in May that estimated the commercial drone market, which it values at $2 billion now, will explode and be worth as much as $127 billion by 2020. Even The Federal Aviation Administration projects sales of UAS for commercial purposes are expected to grow from 600,000 this year to 2.7 million by 2020.

However, U.S. companies haven’t legally been able to use drones for business operations without an expensive and hard to obtain “Section 333” exemption from the FAA. Why? Commercial drone use is subject to manned aircraft rules, which are badly outdated for UAS. And, the FAA answers to a public that is wary of technologies it doesn’t yet understand and worries about safety, privacy and security. Together these have made the exemption process much too difficult and costly for most companies.

Policy is making progress, though. Several years ago the Obama Administration tasked the FAA to integrate commercial drones into the National Airspace so that the U.S. could grasp the opportunities these systems offer. There is too much upside for U.S. industry and for the public (think package delivery, entrepreneurial opportunities) that widespread commercial drone use offers.

Given the mandate, the Department of Transportation’s FAA is moving to make this a reality. In June of 2016, the FAA released its Rules for Small UAS, which will broadly allow businesses to use drones under 55 lbs. for commercial applications without having to go through the onerous 333 exemption process. All that’ll be necessary for business operations to commence is a relatively easy licensing requirement for anyone piloting the UAS. “Part 107,” as the rule is known, implemented on August 29th.

Unfortunately, the rule will be outdated the minute it goes live. The policy, as well intended as it is, just can’t keep up with the pace of technical innovation—especially in the U.S. While the rule is a leap forward for companies wishing to use drones or already using them in business under a specific exemption, restrictions remain under the new rule which in some cases, makes the new rule irrelevant.

For example, UAS are restricted to an altitude of 400 feet, which makes inspections of large structures a challenge; a UAS cannot be flown beyond the pilot’s visual line of sight, even with video, which makes large scale agriculture operations difficult. UAS can’t be flown over or near people, which is a problem for news organizations; and night operations are prohibited, too. There’s a long list of other prohibitions.

Fortunately, the FAA knows the technology is there to do the types of activities in a way that’s safe, secure and doesn’t risk the public’s privacy while gaining its trust. So they left the door open to easing some of these restrictions in the form of waivers. In time, the full potential of UAS should be realized.

Here we see a partnership opportunity between industry and policymaking that doesn’t happen very often. The government wants to help innovators bring novel UAS operations to market, but it needs innovators to help the government make this case to a public wary of UAS.

So while companies getting ready to do business with UAS may want to focus on their own promotion, they also need to give back to the community. This necessitates a ‘give some to get some’ philosophy for building goodwill and increased promotion of UAS best practices to the public and a healthy dose of market education.

For a companies that produce a commercial drone product, service or software, and/or develops pilots and pilot training for the commercial drone industry, or companies looking at UAS to enhance their operations, the opening of our market is obviously a huge opportunity. It’s in everyone’s best interests to work as a community to help the U.S. realize the full benefits of wide scale commercial UAS integration into our National Airspace System.

First-mover commercial drone companies in the U.S. are carving out their niches and drawing tremendous attention with a combination of efforts focused along three key initiatives: 1) Market Education; 2) Proactive and Reactive Issues Response; and 3) Policymaker Relations.

Market Education

As noted earlier, “giving some to get some” has never been so true as it is in marketing for commercial drone applications. And the reporters, analysts, bloggers and new editorial properties popping up to chronicle the industry are thirsty for vetted expertise.

SHIFT was fortunate enough to work with David Baeza, Founder of VineRangers, one of the very first FAA Section 333 exemption holders for a commercial drone business catering to the precision agriculture industry. See some of our early results with him:

–Why 2015 is the year agriculture drones take off – Fortune
–7 green drone companies (and counting) cleared for takeoff – GreenBiz
–Vino 2.0: Making Wine in the Drone Age – Tech.co

Defining the use cases in the commercial space is still critical in the U.S. Taking advantage of education opportunities is a must.

Proactive and Reactive Issues Response

Proactive issues response takes advantage of long-standing issues of evergreen interest to the press. For instance, there is a robust debate in the U.S. around the FAA’s overall jurisdiction over hobbyist drone flights. Several state and local municipalities are now passing ordinances restricting drone flights in response to perceived problems, such as near first responders, or flights within a certain range of buildings and so on.

Two proactive commentary opportunities present themselves here: 1) weighing in on the FAA’s ultimate authority to make drone policy, which trumps state and local; and 2) many of the state and local restrictions being passed in knee-jerk reactions to bad hobbyist behavior is redundant. In many cases there are already laws on the books prohibiting certain behaviors, whether they’re executed with a drone or not, i.e. interfering with first responders in the performance of their jobs.

Again, this is all new to the U.S. media, and so expert commentary is welcome and presents opportunities for commercial drone operators to get broader exposure in higher level publications.

Reactive issues response should be “always on,” and can drive a lot of the immediate turnaround media opportunities.

Policymaker Relations

Any entity entering the commercial drone space does so knowing that 1) it’s a highly regulated environment in terms of actual operations and 2) the policies that make those operations possible are fluid and evolving.

That’s a difficult environment in which to make money because markets don’t like uncertainty. This has kept some potential entrepreneurs ‘on the fence’ until the rules catch the technology.

Companies should immediately join one or more of the groups such as AUVSI or the newly launched Commercial Drone Alliance, which are working to shape policymakers’ perceptions of the industry. This is absolutely critical to have a voice representing the market as Washington wrestles with the implications of drone technology against public misperceptions.

The Commercial UAS industry represents one of the most exciting new frontiers in technology. We’re lucky to be standing on the ground floor of a brand new market and all the opportunities that come with government de-regulation. But to realize all the potential commercial UAS have to offer, there needs to be a lot of cooperation between innovators and those who write policy.

Businesses getting started in the UAS space need to recognize this. It’s imperative they make a commitment to becoming part of the community and communicate key initiatives, champion responsible industry best practices and educate the public to all the benefits drones provide so they can be safely and securely realized. This is the only way market will grow beyond the hurdles it currently faces, and it presents a terrific opportunity for new, drone-related companies to get attention for their offerings.

Joel Richman
Vice President

Want more of an in depth look at the recent changes in policy and outlook on commercial drone technology in the US? Download our free white paper here:

 

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