Civil and Commercial UAS Market Outlook: Part 1

The civil government and commercial drone markets are growing rapidly as UAS proves its worth across several different fields.

The United States and Europe are forging ahead with costly new deployments of UAS to protect their borders. China is reshaping the agricultural market with the rapid spread of subsidized UAS technology for spraying and imaging. Traditional aerospace and defense firms are competing to develop new solar-powered systems to provide low-cost internet. Test programs are operating around the world intended to integrate delivery drones into airspace.

New milestones are being reached that show the extent of the development. In the United States, 484,000 commercial drones have been registered and 188,395 remote pilots certified as of early August 2020. An-other 1.2 million recreational drones have been registered. (Yet it is important to remember that these drones have been registered in the period since Part 107 went into effect in August 2016. Since the effective commercial life of prosumer drones is about a year and a half on average, many are no longer in the fleet.)

In terms of aerospace, the market for civil UAS promises to be one of the most dynamic growth sectors for the next decade, emerging from a $5 billion market (value of air vehicles) in 2020 to nearly quadruple to $18.5 billion by 2029. That represents a 15.7% compound annual growth rate (CAGR) in constant dollars. Over the next 10 years the market will total $108 billion.

Although the consumer systems and commercial systems segments begin the forecast period (2020) relatively close in annual production value of air vehicles at 55% and 42%, respectively, the later segment will exhibit the fastest growth in the market. By the end of our 10-year fore-cast, commercial systems will com-mand 83% of the overall civil UAS market, while the consumer systems will slip to 15% of the air vehicle pro-duction value.

After years of delays, civil governments in the United States and Europe are getting serious about deployment of UAS. Civil government drone spending promises to benefit from growing concerns about border and maritime security in the United States and Europe. Peacekeeping operations for United Nations and other countries will further boost sales. In addition, public safety use for law enforcement and fire control is growing.

The US Coast Guard and the European Maritime Safety Agency are now purchasing UAS services and planning is underway for broader deployment of systems. The US Customs and Border Protection Agency has introduced a pilot program in small UAS. Public safety deployment of drones in the United States is soaring.

Commercial markets are beginning to develop. Many companies are currently doing proof of concept work that creates the foundations for widespread deployment of drones. They are working to prove cost savings and make sure data provided can be integrated into the business’ workflow.

Construction, insurance and energy promise to grow quickly in coming years. Large enterprises will de-ploy fleets of systems. Energy is developing rapidly as multinational companies begin to deploy fleets of UAS. Agriculture, which is currently the largest market thanks to the value of unmanned spraying systems, will grow more slowly due to the currently depressed profitability of the sector and the diffuse nature of decision-making. Delivery eventually promises to be a very large market but will develop first in narrow niches such as delivery to very remote areas such as islands or ships or delivery of high-value, time-sensitive products such as medical supplies.

As the commercial market develops, it mostly will be based on inexpensive prosumer and mini UAVs and will be much more price sensitive than the governmental market. Even local law enforcement agencies will be buying mainly prosumer and inexpensive mini systems rather than much costlier larger UAVs.

While the unit numbers of these UAVs purchased to serve the commercial market promise to be substantial, their value will be a small fraction of that of the costly, sophisticated systems that dominate the military market such as Global Hawk and Predator.