Limitless Sky: The New Drone Economy

Published January 10, 2017

The widespread adoption of drones for commercial uses could be a disruptive force that influences virtually every sector of the United States economy, creating hundreds of thousands of jobs and and billions of dollars in new business opportunities. Coupled with the burgeoning hobby drone market, the impact of this technology could be one of the great economic engines of the 21st century.

That is, if government red tape doesn’t halt the relentless growth forecasters anticipate.

Recreational drones have already “blown up” as a consumer product, with more and more Americans getting the urge to take to the sky with their own unmanned aerial vehicles (UAV). The upswell of hobbyist pilots has created a mini-boon to drone manufacturers and retailers, and a corresponding surge in the purchase of related products — such as drone racing equipment, drone cameras, etc. Even services like drone training have also become commonly available around the globe.

While industry analysts are excited about the economic future of recreational drones, the possibilities pale in comparison to the windfalls that could befall the commercial uses of UAVs. As new innovations in drone technology (like collision avoidance) are pioneered, the potential uses of drones for businesses grow.

Forecasts indicate that the recreational drone sector could surpass $5 billion in economic impact by 2025 and analysts further suggest that the commercial applications of UAVs could cause this economic impact to be magnified tenfold.

Legal Complications

Lawmakers are often playing catch-up when it comes to
creating regulations that govern or restrict the use of technological advancements, and investors and entrepreneurs associated with the domestic drone industry has been patiently waiting for the federal government to ease restrictions.

Limitless Sky: The New Drone Economy

The potential of the drone economy is influenced by legal restrictions.

New federal rulings unveiled earlier in 2016, however, have removed some of the barriers that had previously limited the growth of the industry, causing many analysts to suggest that the drone commerce is on the verge of exploding into a $60 billion a year juggernaut, when recreational and commercial uses are added together.

Early adopters of drone technology, on both a private and commercial front, have been frustrated by confusing and often conflicting restrictions imposed by varying governmental bodies. But the Federal Aviation Administration’s June 21, 2016 announcement is being hailed by many as a key step in opening the floodgates of drone dollars that might pour into the U.S. economy.

While the rule doesn’t exactly give full blessing to some of the more aggressive commercial UAV ideas, such as Amazon’s well-known drone delivery plans, it does pave the way for a huge increase in commercial uses such as surveying, real estate photography, and construction.

And those are merely the obvious industries that will benefit from drone technology. Enterprising entrepreneurs are already coming up with a myriad of unusual business ideas centered on drones, from cowboy drones to herd cattle on the open range to entire marketing agencies built on the premise of using drones to change aerial advertising forever.

The new FAA rulings that are helping to foster these innovations don’t come without some catches, however, including provisions that require all commercial drone operators to take a written test that ensures their aeronautical knowledge is up to par.

New Guidelines

The FAA has repeatedly stressed that they are open to the expansion of the drone economy, provided that restrictions are in place that keep the nation’s airspace safe and secure.

Prior to June’s ruling, those wishing to operate drones for any use deemed commercial had to weave their way through a laborious exemption process that was successful for less than half of those who applied.

And while the loosening of these restrictions does provide increased incentives to those who want to make money with their drones, industry insiders concede that there are still a lot of kinks with the law that need to be worked out before the drone economy is fully launched.

It’s also important to note that the FAA’s new guidelines have been designed not only to create jobs and opportunities for businesses, but also to protect citizens from the most worrisome of the public’s drone danger fears. 

Limitless Sky: The New Drone Economy

The FAA seeks to protect drone operators as well as businesses.

The new laws call for all drone operators to keep their crafts within their line of site, and drone operations are limited to daylight times. Stiff penalties also exist in state and local laws for individuals who encroach on the privacy of their fellow citizens.

The truth of the matter is that society has to adapt to new technologies and this evolution takes time. Balancing the desire to encourage economic growth with the very real questions over the insidious things that people might do with their drones is not something that can be solved with a stroke of the executive brush. Society will evolve over time through the usual series of trials and errors, and lawmakers will react accordingly (though not always as swiftly as investors might want).

For hobbyists, the 2016 updates to law further cement their recreational uses into the national consciousness: operators can use their small crafts for their hobby pursuits so long as they stay five miles away from airports, lower than 400 feet above ground, and register their drones online. One exception: while drones may come in all shapes and sizes, those weighing more than 55 lbs. must be registered through a paper form.

Meanwhile, angel investors, enterprise level corporations and small businesses alike continue to daydream about the limitless possibilities that drone technology can bring, and lawmakers and lobbyists continue with the delicate process of balancing the need for regulation with the desire to let the drone economy take to the sky!

The FAA’s 2016 rulings are seen as an important step in this process, one that will undoubtedly continue to evolve in the coming years. But one thing appears certain, this evolution of both technology and regulatory statutes is almost certain to lead to vast increases in investment dollars and jobs.

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