When I took my baseball-fanatic sons to spring training this year, I had no idea we’d be vacationing at the intersection of disruptive technology, regulation and economic growth. Our hometown team, the Washington Nationals, had been using an unmanned aerial vehicle — a lightweight, remote-controlled drone — to take photos at the spring training complex. Until the Federal Aviation Administration put a sudden halt to it.
Emerging technologies hold the ability to test the status quo of the ways we work and play — like using your smartphone at a baseball game to watch a video replay from high above the field or from unique angles that traditional TV cameras don’t cover. They also hold the promise of economic growth. According to the Association for Unmanned Vehicle Systems International, the drone industry is poised to create more than 2,500 jobs and $460 million in economic activity in Virginia between now and 2017. But the FAA has effectively grounded commercial drones, even demanding the Nationals stop using a picture-taking drone above their own playing fields. This national policy, or lack thereof, means a potential driver of our future economic growth is stymied at a time when all means of economic growth are needed.
A provision of the 2012 Reauthorization Act requires the FAA to clear the path for wider use of commercial drones. That legislation mandates the FAA provide military, commercial and privately owned drones with expanded access to U.S. airspace by Sept. 30, 2015. The news that the FAA approved six sites nationwide — the last of which is Virginia Tech’s test-site program, declared operational on Aug. 13 — is a positive step toward expanded use of drones, but progress has been inconsistent at best. In June, the National Park Service moved to ban drones from all 84 million acres of the public land it oversees.
The market for drones is well situated for growth. The Consumer Electronics Association estimates the global market for consumer drones will approach $300 million by 2018, when sales of consumer drones are expected to reach 1 million units. But the revenue from drone sales is just the beginning. Drones will deliver packages, track important public and private infrastructure and, yes, provide enhanced video-recording capabilities for things like sporting events. When we fold in the accompanying services, the market for drones could easily exceed $1 billion in just five years’ time.
Drones are an exceptional example of how emerging technologies can increase the productivity of myriad diverse businesses. Whether monitoring valuable infrastructure, quickly and inexpensively surveying an area, or delivering rich video in real time, drones will change the way businesses do what they do. The CEA estimates the costs related to using a drone may be one-tenth the cost of other alternatives of certain business activities. Because drones are such efficient cost-reducers for various use-cases, entirely new services and consumer benefits are now on their way to market.
In some ways, the marketplace for commercial drones is limited only by our imaginations. Drones have already helped catch cattle rustlers, capture wedding memories and monitor national borders. In the agricultural sector alone, drones are farming crops, weeding fields and applying fertilizers. Eventually, this technology will be integral to media outlets, real estate professionals and emergency first responders. In July, a three-day search for a missing senior in Wisconsin ended when an amateur drone pilot joined the effort and spotted the man after only 20 minutes.
As in most nascent markets, companies are experimenting with drones across numerous business applications. In July, Amazon petitioned the FAA for an exemption to allow the company to test drones in the U.S., an effort to implement same-day package delivery. Such experimentation can lead to lasting innovation, new business models and economic growth. Without the exemptions, Amazon may have to move its research and development operations abroad, resulting in fewer domestic jobs and less national investment.
In the absence of federal guidelines from the FAA, states are instead crafting their own drone laws, creating a patchwork of different and diverse state laws. According to the National Conference of State Legislatures, 16 states including Virginia have enacted 20 laws regarding drone use — the latest laws, in Tennessee and Indiana, went into effect July 1. This maze of regulations will make compliance much more complicated for companies that want to incorporate drones into their commercial operations.
We shouldn’t delay any longer in opening our skies to new economic growth. While we’re waiting for the government to provide clarity, the projected jobs, economic activity and $4.4 million in added tax revenue the drone sector will provide in Virginia over the coming years are drifting that much further out of reach. We need to feed tomorrow’s economic engine today, but the absence of forward thinking is hindering our potential.
Shawn DuBravac is the chief economist of the Consumer Electronics Association (CEA)®, the U.S. trade association representing more than 2,000 consumer electronics companies. Follow him at @Twoopinions.