Drone Commercialization: The Sky is the Limit

This guest blog post was written by Jaclyn Longo, an Analyst at Propel. Propel is located at Western University and is part of the Campus-Linked Accelerator (CLA) program. The centre provides co-working space, mentorship, seed funding, events and acts as an advocate for local youth-based (aged 18-29) startups in the community. For more information, visit propel.uwo.ca.

Drone Commercialization: The Sky is the Limit

Amazon Drone The commercial use of drones, or Unmanned Aerial Vehicles (UAV) as they are also known, has started to gain popularity, as new and exciting applications for this technology emerge. Drones were originally developed for military use, and while the adoption of this technology for commercial uses has been fraught with various challenges, we are seeing an uptake in the commercial applications of drones. With technology advancements the cost of drones is significantly decreasing, making them more accessible and increasing the commercial possibilities across industries. According to The Association of Unmanned Vehicle Systems International it is estimated that by 2025 drones could create 100,000 jobs and have an economic benefit of US$82 billion[1].

The popularity of the commercial use of drones is growing, as drones are able to shoot high-resolution videos in real time, transmit data and have the potential to save both time and money. The commercial applications for drones are vast and span multiple industries including: construction, real estate, surveying, journalism, weather tracking, law enforcement, emergency services and insurance.

Using drone technology to complete dangerous jobs such as inspecting power lines and oil pipelines has the potential to reduce workplace injury and save lives. There are also opportunities for non-profits and social enterprises to use drones in surveying natural disasters and delivering aid supplies to remote areas of the world.

Two commercial applications that have been widely discussed are the use of drones in retail – for home delivery and in agriculture – for crop surveillance. In 2013 Amazon made headlines when it announced it’s Prime Air initiative that would use Drones to deliver small packages to customers within 30 minutes of ordering. Recently, Amazon has begun conducting flight tests in remote areas of Canada.

Farmers have been some of the earliest adopters of drone technology as there are clear advantages for the adoption of drone technology in agriculture. The data that drones collect can help farmers achieve a better overall picture of the health of their crops and allow for better planning of the use of resources. Giving farmers a birds-eye view of their crops, drones can provide farmers with the ability to selectively fertilize and spray pesticides targeting, only on those plants or sections of crops that really require them creating both economic and environmental value.

There are still many challenges faced in the commercial use of drones. Government regulations, privacy and safety concerns are the major issues that need to be overcome for many of these commercial applications to become a reality.

In the United States, FAA regulations are making the adoption of commercial drones difficult. The FAA requires drone operators to have a pilots license and drones must remain in sight of the operator. They restrict drones from flying in heavily populated areas and near airports. Due to the strict regulations imposed by the FAA widespread use of commercial drones in the US is limited.

Transport Canada has begun implementing new rules making it easier to adopt drones for commercial use. Currently, Transport Canada is working to ease the process and reduce the wait time of obtaining a Special Flight Operations Certificate (SFOC), which is required for those wishing to operate drones commercially in Canada. Recently, Transport Canada has waved the need for a SFOC for drones weighing less than 2 kilograms. While there are still restrictions around operating drones in high-populated areas and near airports, Transport Canada allows drones to fly out of operator’s sight lines with the proper certifications. These more progressive policies for commercial drone use has allowed for growth in this emerging sector and has made Canada a leader in this industry.

With the increasing number of commercial applications for drones emerging there will be greater pressure on governments to adapt their regulatory policies. With this barrier removed it will allow for widespread adoption of commercial drone use to occur.

Investors are taking interest in the commercialization of drones. Investment in drones has reached record levels in 2015, with $172M invested so far. Early stage companies have received most of this funding. However, only 10 companies have received $10M or more in funding. This CB Insight’s article has more information about drone funding and a list of the companies that have received over $10M in funding.

Articles:

[1] http://www.canadianunderwriter.ca/news/drone-uas-sector-has-phenomenal-potential-regulation-the-biggest-barrier-to-widespread-use-marsh/1003657258/?&er=NA