Drones, like smartphones, almost seemed to appear from nowhere and take the world by storm. In truth, the technology goes further back than many people realize. For the first installment of this two-part series, GLOBIS Deputy Dean Jorge Calvo takes us back through some drone history and shares some shocking projections for the not-so-distant future.
Drones flying high around the world
Since the end of World War I, drones—then referred to as unmanned aerial vehicles (UAVs)—have been used by the military. It wasn’t until a few years ago, however, that the commercial industry really took off. Six key factors came together to make this shift possible:
1. Military patents began to expire, opening up access to relevant technologies.
2. Smartphones spurred the advancement of microelectronics—specifically intelligent 3D sensors and dedicated process unit chips—at low cost.
3. The internet of things (IoT) allowed for better communications, cloud computing infrastructure, and a way to meet demand for connected devices.
4. Artificial intelligence and augmented reality developments were fostered by high-priced technology testbeds like LiDAR, fueled by companies eager for competitive differentiation. These companies included the traditional automotive and logistical industries, but also disruptive digital companies like Amazon and Google.
5. Regulations became somewhat more flexible as businesses put pressure on legislators to allow the use of new technology in increasingly large areas.
6. Governments began to throw intense support behind the development of the drone industry and autonomous vehicles, aiming to claim an active role in the Fourth Industrial Revolution.
It is these last two points which today are allowing drones to start flying high in the B2B sector. We can now buy toy drones for less than $50 USD, and even semi-professional ones for $500. This all started in 2016 when many developed countries—the US, France, Germany, the UK, Switzerland, China, Japan, and Singapore among them—began adapting regulations little by little to the growing demand for drones in business.
Some underdeveloped countries in Africa, too, are now showing flexibility in legislation for the use of drones, creating great economic potential to connect far-flung areas with no roads or rails between them. Rwanda was one of the first to introduce progressive transportation programs through drones. Malawi opened an innovative Drone Test Corridor, managed by the country’s Civil Aviation Authority in partnership with UNICEF. Michael Scheibenreif, UNICEF’s drone corridor lead, oversees drone testing on a collaborative platform, a place for governments and partners from the private sector to explore how drones can help deliver humanitarian services. Other African countries, like South Africa, Kenya, and Ghana have also issued regulatory guidelines and initiatives. In essence, drones and autonomous cars will be to today’s national economies what steamboats and trains were to the Industrial Revolution.
The applications of drones vary widely, without limit for the imagination, whether they are meant for open spaces or indoor facilities. Here are just a few:
1. Defense and surveillance
2. Cargo transport
3. Emergency response and disaster management
4. Urban planning
6. Weather forecasting
7. Waste management
9. Mapping and GIS
10. Entertainment and the arts
With so many factors converging and so many applications at hand, growth of the drone industry is proving both exponential and disruptive. Goldman Sachs Research predicts that between now and 2020, there is a $30 billion USD market opportunity for non-military drones. McKinsey estimates that “commercial drones—both corporate and consumer applications—will have an annual economic impact of $31 billion to $46 billion on the [US] Gross Domestic Product.” BI Intelligence estimates 2,423,000 units of global enterprise drone shipments in 2023. In 2016, PwC estimated the total available market for drone-enabled services to be more than $127 billion.
Drones in Japan: Aiding the Elderly and the Golf Green
Japan has some of the strongest governmental support for drones. Prime Minister Abe has openly expressed his support for the drone industry and believes that it is an excellent opportunity for a country of aggressive volcanic geography that isolates much of the aging population. Similar to the projects in Africa, drones in Japan are ideal transport for prescription drugs, blood for transfusions, and other urgent medical supplies.
The Japanese government is supporting drones for commercial use, as well. While some areas do require special authorization and others restrict drones altogether, there are also deregulated areas where the laws are lax. Businesses and private drone owners alike can find these areas online to build navigation plans.
Many Japanese companies are developing drones and experimenting with new business models and services. The Japanese e-commerce giant Rakuten has tested drones on golf courses, delivering balls, food, and drinks to golfers. The Camel Golf Resort is one of these testing sites. It’s located in Chiba, one of Tokyo’s adjoining prefectures, where the government is pushing the most ambitious tests. Also in Chiba, the Ministry of Land, Infrastructure, Transport and Tourism’s Civil Aviation Bureau has authorized a drone delivery service (in which Amazon participates)—the first of its kind in an urban area. The proposal includes the transport of goods from distribution points to various authorized destinations, including parks, commercial facilities, and even the roofs of residential buildings.
Clearly, thousands of companies around the world are ready to make a substantial investment of time and resources. But how can drones be applied to such vastly different industries? In the second part of this series, we’ll look at some specific ways drones are being implemented to improve operations and vault businesses large and small into the technological age.