Initially considered as a sophisticated military tool, drones have now penetrated to many areas of society. Alternatively known as Unmanned Aerial Vehicles (UAVs), this technology has been embraced by businesses across all industries for commercial applications (DroneDeploy, 4). Traditionally, drones were used for basic surveillance, sporting activities, photography, and filmmaking. Commercialization of UAVs has seen almost all industries embrace their usage. For instance, insurance companies are now using technology to inspect incidents and damaged assets (Chamata, 17). Farmers are also using them to collect soil data and monitor crops. It is with no doubt that the micro and macroeconomic impacts of drones is significant. In this light, this paper analyses the economic trends and future commercial drones.
In 2016, the Federal Aviation Agency (FAA) passed the part 107 rule allowing the commercial adoption of drones. As a result of this milestone, large companies scaled in-house UAV programs. According to DroneDeploy, enterprise adoption has been increasing by 20% every month (DroneDeploy, 13). Since the passage of Part 107 Rule, enterprise consumer growth has risen by 5-times. 2017 marked a significant increase in the drone industry. Software licenses, aircraft sales number of businesses setting commercial operations, and service business entrants all recorded massive growth. Similarly, more consumer UAVs are now being used for commercial purposes. Enterprise consumers can get enhanced usability and simplicity.
Figure1: Consumer Drone Market Analysis by Product by Application and Segment. (Source, Grandviewresearch, n.p)
The drone industry has had significant micro and macroeconomic impacts. The industry has contributed immensely to the country’ GDP as well as increasing companies’ capacity by reducing delivery time and increasing efficiency and reliability. The global market for commercial drones was $552 million in 2014 (Grandviewresearch, n.p). The forecast indicated that the market would grow by 16.9% over the next ten years. The growth was majorly attributed to the increased application of UAV in the law enforcement and agriculture sectors. The government was the leading user of the technology followed by the media industry. E-commerce and the broader retail sector have also increased their adoption of commercial drones, where the technology is used to deliver goods to customers. In 2015, Amazon indicated that the company would embrace UAVs to deliver ordered merchandise to customers as a way of improving reliability and reducing delivery time.
Figure 2: Consumer Drone Market Analysis by Product by Application and Segment. (Source, Grandviewresearch, n.p)
The commercial drone market portrays a positive outlook with industry trends and growth rates (Grandviewresearch, n.p). It is excepted that drone sale with hit the $ billion mark by 2021. Generally, the consumer drones, commercial (enterprise drones) and government drones are the major segments that will steer this growth. With regard to commercial drones, the BI Intelligence is expecting shipments to reach 805,000 by 2021. This represents an annual growth of 51% from 2016. The United States has significantly steered the growth of the drone industry, with its drone revenues increasing from just $ 40 million in 2021 to approximately $1 billion in 2017 (Cohn, 2). Drones, both consumer and corporate, will contribute to the national GDP by about $31 to 46 billion in 2026 (Meola, n.p).
Figure 3: Drone Market Shows Positive Outlook with Strong Industry Growth and Trends. (Source, Meola n.p)
The aggregate demand and supply for commercial drones have been on the rise, forcing more technology companies to expand their capacity and introduce new products that cater to the market needs. According to DroneDeploy, the company’s UAVs are being used by major industries including agriculture, mining, real estate, and surveying. The Chine Company, DJI Innovations is the most popular drone manufacturer in the world, with its critical Phantom series drones aiming at both professionals and hobbyists. Crucial other industry players in the industry include Yuneec, Parrot, Autel Robotics, and Hubsan.
Chamata, Johnny Elie. “Convergence of the Unmanned Aerial Industry.” Theoretical Economics Letters 7.02 (2017): 175.
Cohn, Pamela et al. “Commercial Drones Are Here: The Future of Unmanned Aerial Systems”. Mckinsey & Company, 2017, https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/commercial-drones-are-here-the-future-of-unmanned-aerial-systems. Accessed 17 Nov 2018.
DroneDeploy. ” Commercial Industry Trends in 2018″. (2018): 1-26.
Grandviewresearch. “Commercial Drone Market Size | Global Analysis Report, 2022”. Grandviewresearch.Com, 2016, https://www.grandviewresearch.com/industry-analysis/global-commercial-drones-market. Accessed 17 Nov 2018.
Meola, Andrew. “Drone Market Shows Positive Outlook with Strong Industry Growth and Trends”. Business Insider, 2017, https://www.businessinsider.com/drone-industry-analysis-market-trends-growth-forecasts-2017-7?IR=T. Accessed 17 Nov 2018.