The Emergence of Commercial Drones

Unmanned aerial vehicles (UAVs), commonly known as drones, have actually been around for about a century.

Even in 1918, the U.S. military had its first UAV, which acted as a “cruise missile” in combat. Nicknamed the Kettering Bug, it was essentially a flying bomb with 12-foot wings made of cardboard and paper mâché, running off a 40-horsepower Ford engine.

As you might imagine, the military has been a catalyst over the years for the development of UAV technology, which has allowed commercial drones to become cheaper, lighter, and more sophisticated. Today, drones aren’t just for delivering military payloads in foreign lands – UAVs will also be delivering your packages, taking photos, providing wireless internet services, and monitoring conservation efforts in remote locations.

The Commercial Drones Market

The following infographic comes to us from IFLY, a Drone Economy Strategy ETF focusing on the “development, research, and utilization of drones”.

It shows the history of military drone applications, and how that has led to today’s emerging market for commercial drones.

According to BI Intelligence, the total drone market today is close to $10 billion.

And despite the military market remaining the largest for now, it is worth noting that the commercial drone sector will grow at a compound annual growth rate (CAGR) of 19% between 2015 and 2020. Eventually, it will pass the military market in size, as that is only growing at a 5% clip.

The Emerging Opportunity for Commercial Drones

The growing market on the civilian side will impact a variety of industries, including private security, law enforcement, real estate, media, film, construction, mining, agriculture, and utilities.

Hardware for commercial drones is important, especially in the early stages. However, as we see in other sectors, it will likely be the software that makes the difference in many applications. As it becomes cheaper to customize commercial drones, the door will be opened to allow new functionality in a wide array of niche spaces. Sophisticated drones could soon be doing everyday tasks like fertilizing crop fields on an automated basis, monitoring traffic incidents, surveying hard-to-reach places, or even delivering pizzas.

At the end of the day, the impact of commercial drones could be $82 billion and a 100,000 job boost to the U.S. economy by 2025.