Over the past year, while major weapons systems have been canceled left and right as defense budgets have shrunk, Unmanned Aerial Vehicles have remained a bright spot in the market. In fact, some industry analysts predict the global market for UAVs will top $11.5 billion annually by 2020. However, while U.S. firms have managed to stay on top of the market at home and abroad with combat-proven models like General Atomics’ MQ-1 Predator, emerging applications for UAVs could mean some serious changes for the market.
First, in June, FAA opened the door to UAV deployment in civilian airspace. Until June, UAVs had been banned from civilian airspace because of potential dangers to domestic air traffic, including an increased risk of mid-air collision. However, as communications and sensor systems have improved, FAA allowed Boeing to begin civilian “see-and-avoid” testing in June for its ScanEagle UAV, a small, man-portable aircraft.
The Pentagon divides UAVs into three categories: Tier I, lightweight, low-altitude systems; Tier II, medium-altitude, long endurance (MALE) systems; and Tier III, high-altitude, long endurance low-observable systems. Until recently, the military has been far and away the largest buyer of UAVs, spending billions on Tier II systems armed with missiles. Some analysts actually predict this market will stagnate, but that’s because this sector of the market is dominated by a few models like the Predator, the Reaper and the Heron that have ruled the air over Iraq and Afghanistan for years. After all, it’s not as though a company can decide to get into the Predator drone business.
The real growth area for UAVs in the near future is domestic civilian applications. After the suspension of SBINet, the Department of Homeland Security needs a cost-effective way to patrol the border, and UAVs could be the solution. In fact, Customs & Border Protection has already started flying unmanned aerial patrols along high-traffic sections of the border to spot illegal crossings.
State and local law enforcement will also be clamoring for Tier I unmanned systems since small aircraft like Boeing’s ScanEagle are considerably cheaper than helicopters to operate and maintain. Also, because many Tier I systems are man-portable and have a low flight ceiling, they could be operated by police officers in the field with minimal supplemental training.
Since it’s impossible for market newcomers to start building Tier II systems for the military, and there’s no need to fly out of range of enemy countermeasures over domestic airspace, Tier I UAV systems are going to see a much larger market share in the future. New and innovative applications of unmanned aerial systems will fuel growth in this sector, and cost-effective, easy-to-operate systems will dominate the civilian market. Look for unmanned systems to shift away from larger, military models and toward smaller civilian applications over the next five years. In the UAV market of the future, bigger isn’t necessarily better.