Thanks to new rules, commercial use of drones could surge next year.
If the federal government is right, more than 600,000 unmanned aerial systems—a.k.a. drones or unmanned aerial vehicles (UAVs)—will be bought for commercial use in the United States this year.
In 2017? The best estimate is that number will more than quadruple.
That’s because the Federal Aviation Administration is close to updating the rules that have held back commercial UAV operators. Right now, if you want to fly a drone for any business-related purpose, even under limited conditions, you must get explicit permission from the FAA—what’s called a Section 333 exemption.
Between September 2014 and early May 2016, more than 5,100 such exemptions had been granted. Once its new rules reduce the need for most Section 333 applications, the FAA predicts, we could see a burst of commercial interest in UAVs.
“We get a number of calls from people wanting to start up a business or comply with regulations,” said attorney David Agee, a partner with the Husch Blackwell law firm, which has a practice dedicated to unmanned systems.
Don’t be surprised if startups and smaller businesses are some of the biggest movers into the space.
Earlier this year, the Association for Unmanned Vehicle Systems International looked at the first 3,000 exemptions granted by the FAA. The vast majority were awarded to companies with less than $1 million in annual revenue and fewer than 10 employees.
Our Aerospace Heritage
It’s true, other states have seen more commercial drone activity. California, Florida and Texas lead in Section 333 exemptions. But there are reasons to expect UAV growth in the region around Kansas City.
For starters, agriculture represents the third largest market for the UAV industry. Midwestern farmers are a natural customer base. And we’ve got plenty of construction projects and pipelines that need to be inspected from the air. (According to the FAA, industrial inspection is the single biggest market for UAVs, accounting for 42 percent of business.)
Our region also happens to be home to substantial assets in aerospace training and manufacturing. Most people know about Beechcraft, Learjet and Cessna’s presence in Wichita, but there are a string of smaller, though vital companies that specialize in aerospace parts and advanced composite materials.
“I think there’s a significant heritage in the aerospace market,” said Aaron Lessig, CEO of Pulse Aerospace, a Lawrence-based unmanned aerial systems (UAS) automation, flight control and airframe manufacturer.
“If you look at Kansas City, Wichita, the University of Kansas—there is a very strong heritage.”
When it comes to educational institutions, K-State operates one of the world’s best programs for UAVs. The University of Kansas has won national attention for its aerospace design school. Along with Wichita State, they’re part of an FAA center of excellence whose research is helping to develop regulations for drone use.
“We have a lot of sparsely populated areas, which is a great venue for UAS research and really establishing the safety case, in FAA terms, of showing that these aircraft, these systems can be operated safely and integrated into the national airspace,” said Kurt Carraway, the acting UAS executive director at K-State.
Government is starting to invest more in the sector, too. Kansas has created a new UAS director position as part of the state transportation department, with an eye toward encouraging more companies to locate in the Sunflower State.
Here in Kansas City, civic leaders are making strategic investments in connected Smart City infrastructure, which could easily expand to include unmanned systems. The city is one of seven finalists for a $50 million award that could be used for connected transportation, sensor networks and other technology.
“All this amazing new technology is going to connect our world in a way people haven’t imagined yet,” said Casey Adams, founder of the KC Drone Co.
From Soldiers to Hobbyists to Entrepreneurs
Public awareness of drones is high right now, but the basic concept has existed for decades, back to World Wars I and II.
The United States used unmanned aircraft for still-photo reconnaissance during the Cold War. By the late 1970s, Israel had developed drones with real- time surveillance, to great result. That inspired the U.S. military to invest more in unmanned systems during the 1980s, just in time for the first Gulf War, what some consider the first real “drone war.”
As the world’s governments use drones more frequently for intelligence gathering and military operations, we’ve also seen an explosion in smaller, inexpensive UAVs for hobbyists.
On a unit basis, these consumer machines represent the bulk of drone sales. Americans will buy about 1.9 million of them in 2016, or more than three times as many as the larger, more expensive commercial UAVs.
While many of these are used strictly for recreation, several photographers have sidelines taking aerial photos and videos, especially for real estate clients.
Pulse Aerospace’s unmanned helicopters fit into the wide gap between military UAVs and the hobbyist kind. Pulse’s 55-pound Vapor model can stay in the air up to an hour with a payload of 11 pounds.
That might not sound like a lot of weight, but in the right situation, it can literally be a life-saver.
Pulse is part of a pilot project in Australia, where its Vapor UAS is being used to watch for sharks along the country’s coast. If operators spot a swimmer who’s in danger, the drone can drop an inflatable raft that will hold three people.
A few months ago, in a demonstration for the U.S. military, Pulse was able to deliver a 10-pound kit containing blood and medical supplies seven miles away, using a preprogrammed flight plan. Lessig can easily see an application beyond the battlefield: using drones to bring blood and perishable medicines to rural hospitals.
“I think that will be an area where UAVs can have a dramatic effect,” he said.
Pulse has won over clients in the mining, agriculture, utility and surveying industries, which can use the Vapor to quickly map a piece of land. Work that used to take days can be reduced to a half-hour.
“We’re really becoming the leader in those markets because we allow you to do real work,” Lessig said.
Businesses might not be enchanted by the Section 333 process. But K-State’s Carraway said the exemptions have created new and different kinds of opportunities for his program’s graduates.
“When the program first started,” he said, “most of the opportunities involved going to work at Department of Defense contractors as pilots.”
Last semester, only one graduate went into DOD work. Others accepted positions with companies in UAS manufacturing, flight operations or data collection.
Unfortunately, most of the jobs were outside Kansas.
“That has been the trend,” Carraway said, “but we’re working on that.”
The U.S. market for commercial drones is at an inflection point, Lessig said. Companies here are still figuring out the best ways to put UAVs to work in their business. In other countries, where the market is more developed, early adopters are aggressively pursuing drone tech.
“They know what they want,” Lessig said. “They see the advantage of our platform’s integration with an ever-increasing number of sensor payloads to gather actionable data and perform critical work.”
A lot of U.S. business leaders are waiting on the sidelines to see how regulations shape up, Husch Blackwell’s Agee said. He feels that venture capitalists haven’t invested as aggressively in UAS because of this.
Though that’s not true of everyone: “Certain players will be ahead of the game because they’re investing the time and effort now,” Agee said.
While it’s good the FAA is updating the rules, KC Drone Co.’s Adams said, there are other big questions that need to be addressed, like design and manufacturing guidelines for unmanned systems.
Even under the new Section 333 rules, companies probably will have to seek exemptions if they want to fly beyond line of sight. Right now, U.S. operators must have an unobstructed view of their UAVs as they fly them.
Some drone operators have wished the FAA would move faster on loosening the rules. But, Agee notes, the United States has more air traffic than just about anywhere on the planet. Regulators need to make sure UAVs are safely integrated into the national airspace.
Much of the media coverage of UAVs focuses on their ability to shoot video or take photos. Experts say some of the industry’s biggest opportunities lie in the data that drones collect and using that data to create better solutions for businesses.
KC Drone Co. is a good example of this. Its agriculture unit, Fly Ag Tech, won’t just take a picture of a farmer’s fields. Its UAVs’ sensors can capture data about pest infiltration, crop yields and other metrics, which the company’s agronomists can use to advise clients.
Adams is part of another local company, Machine Halo, which is developing a solution that will pull together data not just from UAVs, but multiple sources, to help first responders.
Let’s say there’s a fire on the fifth floor of a building downtown, but nobody’s inside, Adams said. Not a problem: Machine Halo would automatically alert the fire department after it “noticed” temperature increases from sensors in
the building and analyzed a video security feed showing flames breaking out.
As firefighters race to the scene, Machine Halo would start feeding maps of the building’s interior to the heads-up display projected on the inside of their helmet’s face shields. Once they enter the smoky structure, the face shields would throw up warnings about hot spots and the locations of potential victims.
Meanwhile, Machine Halo could use traffic signals to direct traffic away from the building. Public safety officials would get an eagle-eye view of the area with a UAV in the air.
“We are on the cusp,” Adams said, “of some amazing new technology trends in ways you can’t even imagine.”