Three Essentials for Building Public Safety and First Responder Drone Programs

Increasing use of drones surfaces three best practices for state and local police, sheriffs, fire departments, and teams in EMS, search and rescue, tactical response, and disaster response.

 

I just released two new drone industry guides titled Three Essentials For Building Your Law Enforcement Drone Program and Three Essentials For Building Your Fire and Rescue Drone Program.

These are the first in a series of papers intended to share the latest lessons learned in specific industries and how to sustain and grow a drone program.

These guides offer essential best practices for law enforcement and fire and rescue teams. They answer questions like:

  • What have current users learned about what works and what doesn’t?
  • What are the most important topics to know to keep your drone program ongoing?
  • And where should you go to learn what’s next?

Here is an excerpt from the law enforcement guide:

Essential 1 – Take advantage of the latest technology

New technology is progressing rapidly in drones and aerial imaging processing—more rapidly and at lower costs than manned-based aviation solutions. It is important to keep up with the changes that could benefit your program. Nearly every week, a new product is announced. Two of the most exciting recent developments are smaller combination sensors and augmented reality.

The new sensors, like the one found on the DJI Mavic Enterprise Dual, combine visible and thermal imagery in one sensor. Multiple display modes allow you to see either the infrared or the visible image or a combination. Isotherm readouts help you get accurate heat measurements on a variety of objects and scenarios. This gives tactical teams more flexibility–they may no longer need to fly two drones each with its own sensor or deal with the complexity of landing and swapping out two separate sensors on the same drone.

ACTION: Keep up to date by attending at least one commercial drone show a year. When evaluating drone solutions or software applications, ask how new capabilities can meet your mission requirements.  If you don’t have a list of mission requirements, start with a narrow scope of operation. For instance, we recommend you treat drones as a response tool—not a patrol tool—and pick from a list of four operations that your constituents would find most palatable: search and rescue, accident scene documentation, the pursuit of an armed suspect, and disaster mitigation.

The guides describe what many police, fire, and emergency responders have learned from their programs and recommend the actions you should take for successful implementation and ongoing use.

You can download the free guides from our sponsor’s site here:

Three Essentials For Building Your Law Enforcement Drone Program: http://bit.ly/2UbrXcY

Three Essentials For Building Your Fire and Rescue Drone Program: http://bit.ly/2vHIiaM

If you have questions about what’s in the reports or would like to comment on them after reading them, write to me at colin@droneanalyst.com.

Five Valuable Lessons about Drone Use in Public Safety

We just released a new research report titled “Five Valuable Business Lessons Learned About Drones in Public Safety and First Responder Operations.” This is the fifth and final in a series of white papers intended to share lessons learned in specific industries and how to maximize the value drones can deliver in those industries. This year, we built on the analysis we did for the 2016 “Truth About” papers by incorporating real-world experience gained from businesses and drone pilots operating under the Federal Aviation Administration’s Small Unmanned Aircraft Regulations (aka FAA Part 107).

In this new report, we validate how first responders are sending unmanned aerial vehicles into high-risk or remote emergency situations before putting first responders at risk while helping victims more efficiently. We detail best practices for how police, fire, emergency response, and search & rescue agencies can implement drones into their operations. Learn both the strategies and roadblocks to the successful use of drones in this industry, including:

  • Which licenses are required for employees flying drones
  • How to pick the right drone for your specific operation
  • The importance of a roadmap for training and drone maintenance
  • How to deal with the public in a safe and transparent manner
  • When to outsource drone work

Here is an excerpt from the white paper:

Lesson 3 – Training is multifaceted and should not be an afterthought:

“Buying a drone and training go hand-in-hand.  DJI Director of Education Romeo Durscher recommends thorough training on several topics. This includes basic training—as in Part 107 pilot training and “stick time” on the controls of your aircraft of choice—and advanced training for tactical use, e.g., learning the best way to manage the drone before, during, and after deployment.

Gene Robinson (and the Drone Pilot training team) include these and add additional layers of training gleaned from his years of experience as head of Unmanned Aircraft Operations for the Wimberley Fire Department. Some of those experiences and lessons learned are outlined in a white paper on the 2015 Texas Memorial Day flood.  That paper reports that drones—and at one point 16 manned aircraft—were used for disaster relief for multiple days, but not without problems. Problems included multiple rogue manned and unmanned aircraft being operated within the temporary flight restriction, the loss of communication abilities via cell, the line-of-sight problems with handheld aviation radios, and the inability to request FAA approval to operate in the area.”

The report goes on to describe what many police, fire, and emergency responders have learned about what works and what doesn’t. It details mistakes early adopters have made operating their drones and recommends the actions you should take so your implementation and ongoing use is successful.

You can watch a short video here and get the free report here.

If you have questions about what’s in the report or would like to comment on it after reading it, write me at colin@droneanalyst.com.

Image credit: EENA

New Report: Drones in Public Safety and First Responder Operations

It may not seem like it, but drones are still in their infancy and only proving themselves through the rigorous testing done privately, commercially, and by state and federal government agencies. Despite the tangible benefits that drones can provide, the public has mixed sentiments about their use by law enforcement, firefighting, and search & rescue operations.

As early as 2012, this AP-NCC poll found a third of the public fears that police using drones for surveillance will erode their privacy.  But negative sentiment is changing.  In 2013, an Institute for Homeland Security Solutions (IHSS) and RTI International survey found 57 percent of the general public supports the use of unmanned aircraft systems for any application. It found:

  • 88 percent of the general public supports drone use in search and rescue operations
  • 67 percent support drone use in homeland security missions
  • 63 percent support drone use in fighting crime

Nevertheless, despite fears by segments of the public and civil rights proponents like EPIC that broad use of drones heralds a domestic “surveillance state,” many more believe unmanned aircraft systems (UAS) provide tremendous benefits and dividends for public safety. This includes everything from traffic accident investigation, to forensics, to fire investigation and damage assessment.

With that in mind we just released our third research report series of studies that looks objectively at each major commercial market for drones and drone technology. This study titled “The Truth about Drones in Public Safety and First Responder Operations,” shows how drones have been used successfully by law enforcement, firefighters, and search & rescue thus far, reviews competitive and traditional approaches using incumbent technology, discusses the opportunities and challenges posed by regulations, outlines the lessons learned, and discusses what’s next for drones in this industry. Here is an excerpt:

“All these use cases are vital public safety matters that civilian market drones are well suited to handle. Cities, towns, and municipalities facing strained budgets and dwindling resources may more easily be able to afford small drones than traditional big ticket first response equipment and personnel. Consequently, drones will give some local governments a bigger bang for their buck.

But would-be adopters need to know that in the U.S., the Federal Aviation Authority (FAA) controls the skies and has created regulations (safety standards) governing the operation of aircraft. Thankfully, not all, but still some, of the Federal Aviation Regulations (“FARs”) apply to public aircraft. The FAA allows first responders with an FAA certificate of waiver the ability to create their own safety standards for the pilots, the aircraft, and maintenance. Additionally, first responders can choose to also operate under the newly created and liberal Part 107 small UAS regulations if that benefits their operations more.

In the U.S., it’s reported there are almost 18,000 state and local law enforcement agencies with at least one full-time officer or the equivalent in part-time officers.  That includes over 12,500 local police departments and over 3,000 sheriffs’ offices, and 50 primary state law enforcement agencies. The National Fire Protection Association reports that in 2014, there was an estimated total of 29,980 fire departments, of which 19,915 (about two-third) were staffed only with volunteers.  Smaller law enforcement agencies and volunteer fire departments that have limited finances stand to benefit greatly because the price entry point has decreased for consumer drones (like the one pictured in Figure 3), their capabilities have increased, and the new liberal Part 107 regulations make it easier to legally operate.”

The report details major use cases and discusses the challenges and lessons learned by police and search & rescue teams including the lessons offered by Gene Robinson, head of Unmanned Aircraft Operations for the Wimberley Fire Department, from his work in the aftermath of the 2015 Texas Memorial Day floods.

You can get the free report here.

If you have questions about what’s in the report or would like to comment on it after reading it, write me colin@droneanalyst.com.

Image courtesy of AeroVironment, Inc.

FAA Proposed Drone Rules: Market Opportunity Winners and Losers

On February 15, 2015, the commercial drone industry breathed a collective sigh of relief. The Federal Aviation Administration’s proposed new rules for small unmanned aircraft systems seemed, at first blush, somewhat practical.  The FAA regulations will eventually allow commercial operations of drones that weigh under 55 pounds in U.S. airspace, without requiring operators to acquire a pilot’s license. You can read the full 195 pages of proposed rules here (hereafter sUAS notice of proposed rulemaking, or NPRM) and some analysis about them here, here, and here.

In this post, I’ll focus on what I think are the immediate economic winners and losers.  My analysis is concentrated on the business impact and market opportunities that the proposed rules have for drones manufacturers, distributors, service providers, and investors.

What do investors need to know?

According to CB Insights data, 2014 investments in the budding drone industry topped $108M across 29 deals. Year-over-year funding increased 104% as venture firms jumped into the drone space with sizable bets. Still, over the past couple of years, I’ve heard VCs and potential investors discussing the FAA bottleneck and questioning whether this was the right time to invest.  Regulatory uncertainty has kept many on the sidelines. But this new clarity should help investors, including those interested in investing in operational and data / information services.

Clarity comes in not only knowing what the rules will look like, but also in the FAA’s commitment to no longer regulate UAS like they do manned aircraft — and in no uncertain terms the U.S. Department of Transportation’s (DOT) understanding of the macro-economic impact of commercial sUAS. In a document captioned Notice of Proposed Rulemaking Regulatory Evaluation, Small Unmanned Aircraft Systems, the author states:

“This proposed rule would create an enabling business environment which would encourage the growth of private sector activity in the manufacturing and operating of small UAS. Therefore, the major benefit of this proposed rule is that it would enable new non-recreational aviation activities for small UAS in the NAS where such operations are currently not permitted without an FAA-issued exemption. The private benefits would exceed the private costs if there is only one UAS and that UAS operation earns a profit.”

As noted here, it’s possible this is a leaked early draft that has since been revised or is otherwise incomplete or inaccurate. [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Update: see comment below with link to actual doc] Still, the DOT evaluation explores in depth four potential markets: aerial photography, precision agriculture, search and rescue/law enforcement, and bridge inspection. These fall more in line with what I believe are the proper commercial market segments:

  • Precision Agriculture
  • Inspection / Monitoring
  • Mapping / Surveying
  • Film / Photo / Video
  • Public Safety / First Responders

As I see it, all of these markets are winners, but some are bigger winners than others. The devil is in the details, because success in each market depends what type of sUAS operation the sUAS NPRM allows or doesn’t allow.  The FAA summarizes these operational limitations here, and I’ll discuss each market below.

Precision Agriculture – Winner and Loser

Precision agriculture is a farming management concept based on observing, measuring, and responding to inter- and intra-field variability in crops. Precision agriculture uses detailed, site-specific information to manage production inputs. Information technologies enable segmenting a farm into smaller units to determine the characteristics of each individual segment.

For the most part, the proposed rules support the farmer’s and/or researcher’s ability to locate a precise position in a field, observe it, and create maps of as many variables as can be measured — but only on a small scale. That’s because all observation and measurement would have to be done by a drone that is within visual line of site (VLOS) of the operator. The problem is that fields and farms are big– bigger than VLOS.

Sure, operators could conduct many operations in a day by moving section to section to section and stitching together larger maps, but this is costly – both in terms of manpower and time. Even if it was cheaper, the market potential for drones in precision agriculture still needs more vetting. It’s not yet clear how a sUAS can deliver more usable data to a farmer or provide a cost benefit over the existing manned aircraft or the satellite image solutions available to them today (see Film or Farm: Which is the Bigger Drone Market? – Part 2 for more on this).

Bottom line: Demand for turnkey drone systems will increase as farmers and service providers work within the rule constraints (see my list of drone vendors serving agriculture  here). However, the big caveat is drone usage alone will not “transform agriculture” just yet.  For that, we would need to see a change in the adoption rate for variable rate technology (such as applicators) — which is currently down. So, if you are banking on precision agriculture data services, you will continue to see competition from incumbents and continue to see slow adoption for now.

Inspection / Monitoring – Big Winner

With sUAS’s ability to perform functions like perch-and-stare, video capture, and laser scanning, they are poised to replace many of the dull, dirty, and dangerous functions of inspection and surveillance. The main beneficiaries are civil and public entities that perform enterprise asset management (EAM) and facilities/infrastructure management.

Never is the benefit more evident than in the energy, telecomm, and construction verticals.  For example, the sUAS NPRM mentions power-line/pipeline inspection in hilly or mountainous terrain and antenna inspections (page 8f) as examples of possible operations that could be conducted under the proposed framework.  The DOT evaluation goes further and dedicates a whole section on bridge inspection (section IV.A.1.d. page 21ff). I would add to this structures like buildings, oil rigs, refinery flare stacks, cell towers, and wind turbines.

GIS professionals should pay particular attention to the bridge example. The National Bridge Inspection Standards (NBIS) mandates that routine inspections be performed at 24-month intervals. With almost 600,000 bridges in the United States and 300,000 requiring inspection each year, the DOT evaluation report estimates that about 45,000 annual bridge inspections could utilize some form of small UAS. Multirotors in particular are highly adept at getting into tight spaces.  With advent of smaller/lighter survey grade LiDAR, the combo provides a stable and portable platform for precision scanning of bridges. I think drone products and services that target GIS firms are hot—you can read why here.

Bottom line: Demand for and use of drones (especially multirotors) dedicated to asset and infrastructure inspection will see a big uptick. There is also now a very large opportunity for firms like Accenture and IBM to provide information architecture and data integration services for drone data to existing enterprise and mobile applications like SAP EAM and Oracle EAM.  I also see opportunities for companies to provide motion imagery, video analytics, object recognition, and image metadata processing solutions.

Mapping / Surveying – Winner and Loser

As I mentioned above, the new rule supports the ability to locate a precise position, look at it, and collect the data to create maps on a small scale. Again, that’s because all observation and measurement would have to be done within VLOS of the sUAS operator. The problem here is many mapping projects are bigger than what can be captured in VLOS.  As in the precision agriculture example, operators could conduct many operations and stich together larger maps, but this may be more costly than what can be currently conducted by manned aircraft.

Rules aside, good solutions exist today that support autonomous missions beyond line of sight (BLOS) and therefore create large maps in one flight.  Some investors in this market may be disheartened by the proposed rules that restrict flight to VLOS, since so much effort has been put into autopilot / mission planning / ground control solutions.  Nevertheless, almost all of the existing solutions provide semi-autonomous flight capability where the operator is still in control (or can take back control). You just won’t be able to fly multiple drones at the same time. The proposed rules are one operator, one drone.

Bottom line: The surveying industry has the most to gain here. The door is wide open for drone operations like stockpile measurement and small open pit mine mapping.  The door is also open for laser scanning, 3D imaging capture, and data processing that architectural engineering firms can consume.  As such, there are new opportunities for dedicated and differentiated cloud-based in-memory processing data services.

Film / Photo / Video – Big Winner

The DOT evaluation dedicates a whole section to aerial photography (section IV.A.1.a. pages 16ff).  It says:

“Small UAS industry experts have informed the FAA that a proposed rule could enable a viable market for small UAS aerial photography.  These unmanned aircraft operators would likely specialize in low-altitude aerial photography and video. Consequently, once a small UAS aerial photography market becomes established, it would increase safety by substituting an unmanned aviation operation using a very light aircraft for a more complex manned aviation operation that uses a much heavier aircraft.”

Really? The photographic, film, and real estate industries have known for years small UAS are a more viable and less costly substitute for manned aerial photography.  It’s also no secret that this market is already established and towers above all others both in revenue and number of existing service providers (see what I wrote about that here).

Bottom line: Drones have already created new sources of demand for aerial photography, and this will continue in earnest. As with land-based photography, the financial and technical barriers to entry are low, making it easy for businesses to begin offering sUAS-based film and photography services. Now that the regulatory hurdle looks to be low, expect aircraft vendors and specialty retailers to flourish, too.

Public Safety / First Responders – Uncertain

The DOT evaluation dedicates an entire section to “Search and Rescue/Law Enforcement” (see section IV.A.1.c. page 19 ff).  It describes how small UAS missions can create significant cost savings to federal, state, and local government entities because they offer a more economical alternative to manned helicopters. The report estimates (page 20):

“…a significant number of public entities will contract the services of a small UAS operator. … The FAA and industry expect that some of the larger public entities would train their own operators and purchase and operate their own small UAS. The majority of the smaller public safety departments that could not afford to train their officers to fly a small UAS would contract these services out to commercial small UAS enterprises as the need arises.”

If true, this would create a viable market. But there a few catches. The first catch is the proposed rule does not allow sUAS operations at night. The second is there are or will be local rules to contend with that prohibit certain types of operations, like surveilling criminal suspects.  The third is the recent Presidential Memo creating standards for how government agencies and some recipients of federal funds will address the privacy issues associated with drones.

Bottom line: Under the proposed rules, demand for turnkey drone solutions and services for police, fire, and emergency medical services is uncertain.  Technology adoption by fire and rescue may be good, but adoption by local and state police agencies will no doubt be fraught with continued controversy over privacy and Fourth Amendment rights.

Conclusions

Almost all drone industry insiders expect the clarity about forthcoming rules to foster investment that will create new jobs and spur economic growth — if not now, certainly when the proposed rules become law in 2016 or 2017. Expect then to see increased productivity, improved worker safety, and saved lives.  In the meantime, the FAA wants to hear from you about the proposed rules (see 31 Questions the FAA Wants you to Answer).

I would love to hear your thoughts about the proposed rule for commercial drone use. Feel free to comment or write me at colin@droneanalyst.com.

Image credit: Shutterstock[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

When Lockheed Meets GoPro: Ohio UAS Conference Wrap Up

Over the course of three days in August, I along with more than 670 participants at the Ohio UAS Conference 2014 in Dayton, OH, witnessed a large number of government and aerospace company attendees interested in taking drones into commercial markets.  From the dozens of presentations and interactions I had with academics, military contractors, aircraft manufacturers, parts suppliers and many others at the event, it’s clear that government and aerospace have jumped on the drones-for-commercial-use bandwagon.  But, for a number of reasons, this group’s aircraft aren’t going commercial just yet.

To be clear, the Ohio show was about showcasing proof of concepts and building partnerships – not flying and getting customers. This stands in stark contrast to the Precision Aerial Ag Show I attended earlier this summer, where many vendors demoed their aircraft and showcased their customers and established relationships with local service providers.

Why the dissimilarity?  Part of the difference is in approaches to FAA regulations.  The aerospace and military contractors play it safe by following all the FAA guidelines — regardless of which airspace they fly or test in.  But commercial vendors, whose aircraft and commercial applications are intended only in Class G uncontrolled airspace approach FAA guidelines as just that—guidelines. I wrote about these “radical opposites” in The Business of Drones: A Tale of Two Cities.

What I found interesting about the Ohio show is that it revealed evidence of a closing gap between commercial and public sector approaches to drones. I see a trend in which aerospace companies are beginning to adopt model aircraft and consumer technology. Let me explain by telling the story of three vendors I saw.

Detroit Aircraft – Where Lockheed Meets GoPro

Thanks to Detroit Aircraft, I got my first hands-on look at Lockheed Martin Indago VTOLLockheed-Martin Indago VTOLDetroit Aircraft is an authorized distributor of the Indago. And it is one sleek, sophisticated machine. It is perhaps the most highly engineered quadcopter system ever built. And you would think so given Lockheed’s deep R&D pockets and experience with programs like Desert Hawk, Persistent Threat Detection System aerostats, and the K-MAX unmanned helicopter system.

But the Indago wasn’t engineered for those same purposes nor by those groups.  Rather, it was created by Procerus Technologies, a company Lockheed Martin acquired in 2012.  The target market for this system was to be public safety / first responders and compete with the likes of the Aeryon Scout and Draganflyer Guardian.

For the most part, the $45K Indago system is capable for first-responders.  The copter is compact, lightweight (5 lbs.), and folds up, so it’s packable.  It’s enclosed, so it’s all-weather. It’s got a removable two-sensor gimbal (video and infrared), an IP-based digital video and data link, a hand controller and/or full ground control station, zoom-in video monitoring, and much more.  It seems the engineers thought of everything – including putting a GPS on the hand controller so the copter can ‘follow me’ wherever it goes. But they missed a big feature. The Indago lacks pretty standard video recording capabilities — capabilities that you find on a point-and-shoot camera and hobby store quadcopter. There is no onboard HD video recording, no live stream HD, no stabilizing gimbal for the camera, no HD 1080p / 60 fps recording, and no still photography for photogrammetry or near-infrared image capture.  Bottom line: What you see and record on the downlink monitor is irresolute shaky video.  Oh my.  That’s four years behind.

Not to worry. Enter Detroit Aircraft. When they got a hold of the Indago, they realized these shortcomings straightaway.  The first order of business was to engineer a 2D gimbal mount and video feed for a GoPro HERO camera. At least now you can record stabilized HD video. They also affixed a consumer camera and an infrared trigger for photogrammetry.  More is being done.  As this firm continues testing and integration you can expect Lockheed Martin to catch up with off-the-shelf model aircraft technology.  For more on nuances of modern aerial photography see this post.

Camo LLC – Testing Open Source. 1, 2, 3

Nobody wants drones to collide with each other – let alone collide with manned aircraft.  So, you have to test prevention systems to see if they work.  Camo is doing that.  Camo LLCAs ‘system of systems’ subject matter experts, their discipline and attention to detail make them ideal candidates for this. They do test and analysis planning, execution, and reporting for integrating war fighting systems.  In layman’s terms, that means they test all the individual sub-systems to make sure they talk to one another.

Systems of systems engineering is much needed if we are to see large-scale integration of commercial drones into controlled airspace.  Camo is well equipped for testing the integration of ADS-B with autonomous flight controllers – which they are doing.  ADS-B or ‘automatic dependent surveillance – broadcast’ is a cooperative surveillance technology in which an aircraft determines its position via satellite navigation and periodically broadcasts it, enabling it to be tracked. The information can be received by air traffic control ground stations as a replacement for secondary radar.  It can also be received by other aircraft (or drone) to provide situational awareness and allow self-separation.

But here is the news. They are testing SkyGuard ADS-B on a Mentor-G fixed-wing model aircraft.  The auto-pilot flight controller is open source APM 2.6 by 3DRobotics.  Their flight is Mission Planner which is also open source.  What gives?  Why would a military vendor be testing on model aircraft and open source technology?  Well, for one thing, cost.  It’s cheaper than licensing a proprietary system and in some cases it’s just simply a better choice.  Open source drone software has in some ways become more functionally mature than its military counterpart.  As I said above, this is a new trend. You can find out more on open source drone technology here.

SelectTech Geospatial – The Monster Garage of Drones

SelectTech Geospatial (SG) has the local reputation of being the ‘Monster Garage’ of UAS. The Monster Garage TV series used to assemble a team of people with mechanical, fabricating, or modifying expertise to modify a vehicle into a “monster machine.” This generally meant making one vehicle that could transform into another. While the soberness of such designs was many times in question (such as when a police car transformed into a donut shop), the ingenuity of the engineering was not.  Such is the case with SelectTech.  This engineering and technical services company started as a rapid prototyping manufacturing service for military hardware and systems and soon realized the market potential for drones doing civil geospatial applications services.  SG is located at the Springfield Beckley Municipal/Air National Guard airport in Springfield, OH.  The facility is a renovated 17,000 sq. ft. hangar capable of high tech engineering and design, software development, prototyping, manufacturing and production, product validation and extensive flight testing.

At the conference, they exhibited some of their unique monster machines – like this aircraft Convertible Fixed Wing Quadcopterwith a removable fixed wing that allows it to be transformed into a multirotor quadcopter.  What they didn’t show was this UAS designed and built back in 2011 with the help of a 3D printer. This was the first non-government-built aircraft of its kind. It has a wingspan of four feet and weighs about five pounds. Powered by an electric motor and lithium polymer batteries, it flies in winds in excess of 25 knots. But here is the news.  The initial flight trials were made at the Springfield-Beckley airport under The Academy of Model Aeronautics (AMA) flight rules – not under FAA rules for Certificates of Waiver or Authorization (COA) or Special Airworthiness Certificate (which are normally required for UAS aircraft). So, basically, it is an advanced model aircraft and one more example of an aerospace company adopting model aircraft and consumer technology.

Wrap-up

To reiterate a point I made in this post, aerospace firms and military contractors have to a great degree been naive about the power of what a model aircraft drone can do commercially and how overpriced military-spec drones are for the civilian market.  It seems that trend is changing and with firms like the three I mention above, this convergence of technology will continue.

As always, feel free to comment or you have questions and would like to discuss any of this one-on-one, email me at colin@droneanalyst.com.

Five Reasons the AUVSI Got Its Drone Market Forecast Wrong

My guest blogger is Mitch Solomon of Aironovo and this is an excerpt from his post which we developed together. You can find his post here.

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Since its publication in early 2013, AUVSI’s The Economic Impact of Unmanned Aircraft Systems Integration in the United States has become the gold standard forecast for the commercial drone market, garnering media attention typically reserved for celebrity weddings and babies born to royalty.  Its primary forecast is that the UAS market will reach a whopping $1.14 billion [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][1] in the first year after the FAA issues favorable regulations and that the precision agriculture market will “dwarf all others.”

The accuracy of these predictions is enormously important. A lot of people – tens of thousands, if not more – have been relying upon them for big decisions like, “Should I leave my job to start a drone company?” or “Which market should my company pursue?” Commercial drones are not just cocktail party conversation–they are increasingly driving the flow of capital and labor, and impacting many lives in the process.

Inquiring Minds Want To Know

Recently, however, a growing chorus of industry observers has started to ask questions about the reliability of AUVSI’s findings. This post is a good example. These individuals, many of whom are among the true pioneers in commercial UAS usage, can best be characterized as enthusiastic but pragmatic UAS evangelists who don’t want to see unwarranted hyperbole lead to unmet expectations.  Many realize that initially overhyped industries never recover because customers, investors, and employees who were burned in the initial wave of unmet expectations are difficult—if not impossible—to ever win back.  They are passionately committed to the industry’s success and believe that rational expectations are a key part of it.

With no axe to grind or agenda to advance, I [Mitch Solomon] partnered with Colin Snow @droneanalyst to explore whether the skeptics and pragmatists were on to some something.  We felt our combined backgrounds in market intelligence and tech market strategy would give us a reasonable set of expertise to draw upon and would help others form a more balanced opinion of AUVSI’s forecasts.  So over the past several weeks, we’ve been carefully reviewing AUVSI’s report, as follows:

  • Compared their research methodologies to what we believe to be best practices in market research based upon our own experience.
  • Conducted an in-depth interview with the researchers themselves, so that we could directly ask them questions about their methods and results that were not made clear in the report.
  • Initiated a follow-up discussion with AUVSI leadership to understand their perspective on the report and its origins.
  • Performed intensive primary research with about 20 carefully selected professionals in the field of precision agriculture to understand their UAS adoption plans, since the report’s findings are almost entirely based upon rapid adoption by American farmers.

We then synthesized our findings into the following five conclusions about the report and its reliability.

  1. Research Can Be Objective, But Don’t Assume It Is

First and foremost, every reader of AUVSI’s report needs to understand that it is not an objective piece of research.  The report was commissioned not to paint an accurate picture of how the commercial UAS market is expected to evolve, but to give the 50 states and their elected officials the data they needed to:

  • lobby for funding during the now completed FAA-sponsored competition for UAS test sites, and
  • push the FAA to move more quickly on the integration of UASs into the national airspace.

These are certainly worthwhile goals, and AUVSI should be commended for pursuing them.  But as a direct result, the implicit (if not explicit) mission for the two researchers who did the work was to come up with the biggest numbers – the largest market, fastest growth rates, and biggest costs of delaying integration – that they could.  An objective attempt to size, segment, and forecast the commercial UAS market (all of which the report appears to be), is something it never actually was, and we believe it’s critical that all participants in the UAS industry know this and avoid making decisions based upon it.

  1. Methodology – Boring But Oh So Important

A biased agenda is only one part of the story regarding the reliability of AUVSI’s findings.  An equally important part is the quality and reliability of the research methods.  Generally speaking, strong research methods yield highly defensible results.  While presented somewhat differently in the report, the methodology used by the researchers can be summed up as:

  • Studying UAS adoption in Japan
  • Adjusting the Japanese experience for the US market
  • Asking experts how big they think the market is / will be
  • Applying research on new technology adoption to the US UAS market

As experienced researchers, it sounded pretty good to us at first.  But, unfortunately, it did not hold up very well to careful scrutiny.

  1. Japan – When the Best Available Proxy Just Isn’t

We like the idea of searching for analogous markets and scenarios that can serve as the basis for forecasting the US market.  The question is: Is Japan an analogous market for the US? We believe that the US and Japan are so different, and the magnitude of the required extrapolations so enormous, that the resulting data is not useful.  Most in the industry already know that Japan’s UAS market remains dominated by one product, the Yamaha RMAX (77% market share in Japan), which is used to spray a large percentage of the country’s rice fields.  These fields tend to be small (less than five acres), are often in densely populated areas, and are located on steep hard-to-reach hillsides.  In contrast, rice represents a tiny percentage of US agricultural output.  Our farms are comparatively huge (very often running well into the thousands of acres).  No single product, much less a relatively large, unmanned helicopter from Yamaha is likely to dominate the American market.  And remote sensing, not pesticide application, is almost certain to be the dominant use of UAS for the major US crops of corn, wheat, and soy.

While we understand that Japan has been the most aggressive adopter of commercial UAS technology as a result of its rice industry, and we appreciate the resulting temptation to use Japan as a proxy for the United States, we see such a large disparity between the agricultural economies of the two countries that we find it impossible to draw any parallels that inform how the UAS market in the US will evolve.  And while no other country serves as a better proxy than Japan, the absence of a better alternative cannot justify the use of a bad one.

  1. Expert Opinions or Really Just Guesses?

Another method used by the researchers is referred to as “survey results.”  In short, the researchers conducted 30 telephone interviews with industry experts and asked many questions, including those regarding two critical matters: the size of the commercial UAS market, and the relative size of key market segments.  The responses were then used to develop “reasonable estimates.”  On the surface, the approach of asking experts for their opinions seems sensible whenever you’re conducting research.  However, many of the experts that were consulted were hand-picked by AUVSI, which immediately introduces the possibility (likelihood?) of bias given its agenda.

Perhaps more important, not every question is one that experts can necessarily answer well.  Certainly UAS industry experts would generally be well prepared to share their opinion on whether fixed wing or rotor aircraft will be more useful for particular applications, or what regulations make the most sense for the small UAS market.  But the idea that you can ask experts for opinions about the size of a market and obtain meaningful results is, we believe, inherently flawed.  Unless these experts were professionals focused on sizing, segmenting, and forecasting the commercial UAS market (and nothing close to 30 such professionals exist), the opinions voiced by the “experts” are nothing more than guesses, akin to asking 30 people how many clouds there are in the sky and expecting to get the right answer.  Our experience in sizing markets, and in working with many experts across a wide variety of markets over many years, gives us considerable confidence in stating that very few people have good insights into how big a market is today, much less how big it will be years from now, even if they work directly in it.  The lack of insight is only compounded for complex, nascent markets like the one for commercial UAS.

  1. A Brief Literature Search Isn’t Really a Research Method

The final method used by the researchers was a “brief search” of “literature…on rates of adoption of new technologies.”  The authors explicitly state that they could have gone deeper in investigating how this research might apply to UASs, and that a follow-up study on this subject is recommended.  That they simultaneously cite the use of the literature as one of their four methodologies, yet characterize their search of the literature as “brief” and recommend a follow-up study raises serious questions.  From our perspective, the brief use of literature on technology adoption trends is far from a true research method. It’s more akin to subject matter expertise and qualitative insight that professional researchers might use to inform or validate a forecast they developed with rigorous quantitative techniques.  How it was actually used and what value it added to the research is unclear, other than allowing the authors to make the statement that because UAS are already being used “….we reject the notion that these products will not be adopted,” a statement that even a layperson with little or no knowledge of UAS could likely have made.

In sum, we see a methodology that erroneously uses Japan as an analog; uses experts for answers that are really just guesses; and relies upon a loose, limited, and ambiguous application of prior research on new technology adoption to validate the statement that UAS will, in fact, be used in America.  As much as we want to support AUVSI, the authors, their methodology, and the research results, we simply cannot.

Sometimes You Get Lucky

As a final point, we do need to acknowledge (and quickly refute) the possibility that despite the flawed methodology, the research findings are reasonable, by pure chance.  Perhaps, as the authors assert, the US commercial UAS market actually will be at least $1.15 billion in the first year after rules are approved.  And perhaps 80% of this, or roughly $900 million will be driven by the precision agriculture market.  But at the risk of disappointing the reader, and with a view toward keeping this post a reasonable length, suffice it to say that while we have high expectations for the US commercial drone market, we do not see a billion dollar market in year one.

We base our position on the deep understanding we have developed of the precision agriculture market, which is at the heart of AUVSI’s forecast.  Indeed, the many in-depth interviews we’ve conducted with farmers, precision agriculture vendors, crop scientists, crop scouts, agriculture equipment dealers, input vendors, academic researchers, manned aircraft operators, satellite imaging providers, UAS-service providers, and many others indicate a building interest in the use of remote sensing in general, and in UASs in particular, but do not support the notion that a mad-dash by farmers and their consultants to use UASs is underway or right around the bend.  And after looking at many other vertical and application markets for UAS, we do not see any – not public safety, inspection, photography, mapping or a variety of other possibilities – that can close the resulting multi-hundred million dollar gap in the AUVSI forecast created by the much slower adoption we see in precision agriculture.

Acknowledging the Effort

Of course, it’s easy to critique the work of others, and hard to do the work yourself.  In defense of the report’s authors, we need to acknowledge that they did a lot with a little.  They had a budget to work within that was much smaller than is typical for an assignment of this complexity, and they invested much more time and effort than the budget allowed.  Like virtually almost everyone else in the brand-new (some would say still non-existent) commercial UAS industry, they had limited prior exposure to the commercial UAS market, making their learning curve steep.  And they had complex agendas to meet in order to satisfy their client, AUVSI, and its many stakeholders.  In light of the foregoing, there is much for which they should be commended.  But creating a forecast for the commercial UAS industry that participants can rely upon for critical decisions is not one their accomplishments.  Indeed, it’s not what they set out to do in the first place, so they can’t really be faulted for not accomplishing it.

Looking Forward

As we look to the future of the commercial UAS market in America, we believe the need for reliable data and insights is more acute than ever.  Critical decisions about products, markets, channels, and operational best practices are being made daily, even as we write. UAS technology vendors, service providers, and end-users are relying on intuition, gut feel, or data that is very likely misleading.  Some decisions will still turn out to be right, but many others will unnecessarily result in big missed opportunities, significant wasted time and resources, disappointed customers, angry investors, disgruntled employees, and many other negative outcomes that certainly could have been avoided.

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[1] AUVSI’s forecast implies a UAS market that is likely significantly greater than the $1.14 billion in 2015 shown in the report, because it does not address the large part of the market that is currently being satisfied by offshore vendors.  The $1.14 billion represents only product supplied by US manufacturers of UAS.  It may also fail to include industry profits, though further investigation would be required to confirm this.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]