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Inside the drone economy

By
Clay Dillow
Clay Dillow
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By
Clay Dillow
Clay Dillow
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May 13, 2013, 5:00 AM ET
A Predator drone operated by U.S. Office of Air and Marine.

FORTUNE — Last month the Association for Unmanned Vehicle Systems International, the unmanned systems industry’s largest trade organization, released its first economic study detailing just how an expected $82 billion in economic impacts resulting from the integration of unmanned aerial systems (UAS) into the national airspace will be spread across the 50 states. But perhaps “detailing” is the wrong word. While the report is arguably the most thorough examination of the burgeoning drone industry’s potential economic impacts to date, even the report’s own author admits the UAS industry remains so nascent that the data necessary to make comprehensive projections simply doesn’t yet exist.

“Assuming the FAA does come up with a set of rules in the next two or three years and we get this thing rolling, here are the things that I’m pretty sure of,” says Darryl Jenkins, a 30-year veteran of the aerospace industry who now serves as an airline analyst as well as the co-author of AUVSI’s UAS economic impact report. “We’ll probably start off with exponential growth over a three- to six-year period. After that the growth rate will level off — it will continue to grow at a faster rate than the economy in general, but it will be slower than it was in the initial years. Those are the things that I’m real sure of. After that a lot of uncertainty comes into the picture.”

Indeed, uncertainties abound in the UAS space. Under a Congressional mandate handed down last year, the Federal Aviation Administration is required to integrate small UAS for civilian and commercial applications into the national airspace by end of Q3 2015, essentially opening up American skies to swarms of unmanned systems. (The FAA has projected that 30,000 UAS will be flying by 2020 — although what data it used to come up with such a number remains unclear.) But there’s no guarantee the FAA will meet that deadline, or what additional restrictions might be placed upon civilian and commercial UAS when they are finally integrated into civilian skies.

MORE: 9 states poised to dominate the drone economy

Then there’s the staggering lack of end-user data. In the history of aviation there’s never been anything like UAS, and until civilian and commercial UAS are allowed to fly it’s impossible to know just exactly how — or by whom — they will be employed. And without data on UAS usage and applications — or even how they will be regulated — it’s difficult to project how and where the future of the UAS industry will take shape.

Difficult, but not impossible. While hard, numeric data may be scarce, various intangibles and other useful indicators — existing aerospace industry infrastructure, education, and workforce training in UAS engineering and operation, existing government and military research facilities, state-by-state policies, and legislative attitudes toward UAS — paint a fairly clear (if not comprehensive) picture of how the UAS industry can be expected to shape up over the next several years.

There are still plenty of variables that could shake up the UAS landscape, not least of which is the FAA, which will certify six federally-sanctioned UAS test sites across the nation sometime before the end of the year (each test site is expected to draw significant R&D investment to its host state, and there are currently 37 states competing for those six certifications). But by recognizing those variables and factoring in the many intangibles as well as the hard data that is increasingly available, it’s possible to begin visualizing where the drone economy lives now, and where it’s likely going to live in the future.

Here is a closer look at how drones will affect the U.S. Economy.

About the Author
By Clay Dillow
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