Farnborough, United Kingdom – July 16, 2018. Civil Unmanned Aerial Systems (UAS) are attracting record levels of venture capital and promise to be the most dynamic growth sector of the world aerospace industry this decade, reports Teal Group.
“The groundwork is being laid for explosive growth in the civil UAS market,” said Philip Finnegan, Teal Group’s director of corporate analysis and author of the study. “The prospect for strong growth as airspace opens is attracting record levels of investment and the involvement of technology giants. New hardware, software and services are enabling businesses to begin to incorporate unmanned systems in their operations.”
Teal Group’s 2018 World Civil UAS Market Profile and Forecast projects that non-military UAS production will total $88.3 billion in the next decade, soaring from $4.4 billion worldwide in 2018 to $13.1 billion in 2027, a 12.9% compound annual growth rate. The forecast includes commercial, consumer and civil government systems. Teal Group, provides support for the FAA in the preparation of its commercial UAS forecast.
Commercial use will surpass the consumer drone market in 2024, becoming the largest segment of the civil market. It will grow eightfold over the decade to reach $7.3 billion in 2027. “The growing promise of the civil market is attracting the world’s leading technology companies, driving ever faster development of systems and business applications,” said Finnegan. “As potential corporate clients move from proof of concept work to deployment of fleets, the market will soar.”
Firms in traditional aerospace, data analysis, semiconductors, telecommunications are all driving aggressively into the civil market. Technology companies like Intel, Qualcomm, Microsoft, Apple as well as venture capitalists have poured more than $500 million into startup investments in 2017, a record level, and more than $2 billion since 2012. US start-ups have received 76% of the funding, enabling them to take the lead in development of drone analytics. Chinese firms, which have received 4% of the investment, are focusing on continuing their lead in hardware, moving from consumer to commercial systems.
While funding still goes for new drones focused on specialized markets, increasingly the venture capital funding is shifting from hardware to software and services that will make drones more useful. Funding is being used to develop the scale needed to serve large corporations.
As a market segment, construction will lead the commercial UAS market over the next decade. All 10 of the largest worldwide construction firms are deploying or experimenting with systems and will be able to quickly deploy fleets worldwide.
Agriculture, which is the most established commercial market thanks to Japan’s use of high value spraying UAVs for decades, has tremendous potential, but will grow more slowly than other sectors. It still will rank second worldwide over the next.