The following questions recur frequently (in various forms) at unmanned aviation conferences, and the answers provided below represent an amalgamation of inputs from those manufacturers and government officials responding to them, as well as from official documents and briefing materials.
1. What is the current size of the worldwide and U.S. unmanned aviation markets?
An estimate can be made by extrapolating the FY08 President’s Budget for Department of Defense unmanned aircraft systems to the worldwide market. DoD, the world’s largest customer for UASs, plans to spend $12.2 billion over the Fiscal Year 2007-2011 5-year period on UAS research, development, test & evaluation (23.3%), procurement (62.6%), and operations & maintenance (14.1%). This is an average of $2.4B per year, with a 46 percent growth occurring between FY07 ($1.8B) and FY11 ($2.6B), almost all of it in the procurement sector (some 200 percent). RDT&E and O&M expenditures, after factoring in inflation, are essentially flat over this period. (source: OSD Unmanned Systems Roadmap, 2007)
Within the U.S., the Department of Homeland Security is the second largest UAS customer, spending about 3 percent of what DoD does each year on UASs. Adding all other U.S. spending on UASs, government and commercial, to what DHS spends would total at most 10 percent of what DoD spends, so total U.S. spending over the 2007-2011 period is expected to be $13.4B, or an average of $2.7B annually.
Worldwide, 50 countries operate UASs, although only 22 manufacture them. The U.S. is currently estimated to compose 55 percent of the worldwide UAS market. By extrapolation, this makes the worldwide market for unmanned aviation over the FY2007-2011 5-year period some $24.4B, an average of $4.9B per year.
Figure 2. Current Worldwide UAS Market |
The largest contributor to this growth is the DoD’s procurement of UASs, and the dominant assumption is that the main driver for this procurement, military operations in Iraq and Afghanistan, continues throughout this period. If the U.S. military redeploys from Iraq in the near term, this could reduce UAS procurement spending, which in turn could reduce the above U.S. and worldwide UAS market estimates.
The U.S. unmanned aviation industry today consists of 85 companies located in 33 states and a roughly equal number of component suppliers. Of these 85, 58 are very small businesses (less than 20 employees), and 62 produce no other products except unmanned aircraft. Nine of the remaining companies are large aerospace corporations whose unmanned aviation segments account for less than 1 percent of their combined revenues of $143 billion. (See Figure 4.)
2. What are the likely dynamics of this market over the next decade?
The “dynamics” of the unmanned aviation market will depend greatly on what airspace policies are implemented by the various nations using them. Within the U.S., current airspace policies allow UASs to fly by one of three avenues, a certificate of authorization or COA (public UASs only), a special airworthiness certificate for experimental purposes or SAC (civil or public UASs), or by remaining within special use airspace or SUA (public/military-sponsor only). This situation is not expected to change over the next 5 years, due, among other issues, to the lack of an accepted solution for automating see and avoid provisions aboard UASs.
The FAA forecasts requests for COAs will grow from 54 in 2005 and 107 in 2006 to 428 in 2010. It anticipates SAC requests will grow from 5 in 2005-06 to 42 in 2010 and 59 by 2011. Together, these rates predict a 900 percent expansion in UAS flight activity in airspace shared with manned aircraft by 5 years from now.
The second half of the next decade will likely see a resolution of this key issue as well as, hopefully, the others, making this a transition period as far as “market dynamics” are concerned. This transition period will see the start of routine flights by UASs in non-segregated airspace along our borders, off our coasts, above airline/business jet altitudes (50,000+ ft), and at very low altitudes (under 1000 ft). Routine, or “file and fly,” operations will eventually offer a fourth avenue for UAS access to the National Airspace System, although some UASs will need to continue to use the COA or SAC process.
3. What segments of this market will see the largest growth?
If segments are defined on a customer basis, the U.S. military, with a projected UAS investment growth of some $800 million (46 percent from a starting point of $1.8B) over the coming 5 years, will see the largest growth, with the civil government segment (DHS, NASA, NOAA, et al) second. The commercial segment however will likely overtake the civil government segment in the latter half of the coming decade.
If segments are defined by category of UAS, the small UAS class will probably see the largest growth, certainly in numbers, if not in value (one Predator B aircraft costs the equivalent of 740 Cropcam aircraft). It will likely be the dominant UAS class of choice for the anticipated expansion in the commercial segment.
4. What will be the regional trends in research and production?
The most likely trend in unmanned aviation research over the coming decade will be in developing automated collision avoidance systems. Today, those companies leading in this research are scattered across the country, in the Boston, Washington, Dayton, Dallas, Minneapolis, Cedar Rapids, and Los Angeles areas.
With some 85 companies in 33 states, UAS production is currently in an over-supply, under-demand status, although many of these ‘companies’ are essentially incorporated RC model hobbyists. The two maps below contrast the manned versus the unmanned aircraft production situation. From the unmanned map, it is apparent that these 85 companies are located in every U.S. region except the Northern Plains and Rocky Mountain regions. Once airworthiness standards for UAS production are established by the FAA, probably in the latter half of the coming decade, many of these companies will revert to being hobbyists and some consolidation will take place among the larger ones.
One demonstrated trend is the relocation of UAS production facilities to low-labor cost regions. Examples include Northrop Grumman locating its Fire Scout and Global hawk fuselage production to Moss Point, MS, and Aurora its Hunter line to Starkville, MS.
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