Acquisition Global Viewpoint – May 2016

Draconian Drone Regulation May Stifle Innovation

Current regulation of drone use is patchy at best, and regulators are constantly playing catch-up with difficult questions and issues surrounding drone use and need. According to analysts IHS a substantial learning curve is needed before the commercial use of drones reaches full potential and before effective regulation can take hold.

In the past few years, drones have risen from being merely fun and novel consumer toys to earning more serious regard—as well as tangible deployment—in commercial applications. While almost 3 million drones were sold last year into a variety of uses, primarily consumer, by 2020 over 10 million of these unmanned devices will be shipped, states Morrod on an IHS blog post, with commercial applications starting to become their main purpose by then. But for the future of drones to successfully transition to a wider range of truly commercial uses, comprehensive regulatory changes need to occur.

According to Tom Morrod, Senior Director for Consumer Electronics, Broadband and Video Technology at analysts IHS in most countries there is no history of unmanned vehicles, so regulations have developed as a reaction to technological change rather than as a means to enable an industry need.

While consumer drones, for the most part, sit broadly outside of regulations—or are treated as model airplanes, commercial applications are generally only allowed by specific exemption that is granted by the aviation regulator for each country.

Tom Morrod, Senior Director for Consumer Electronics, Broadband and Video Technology at analysts IHS

Tom Morrod, Senior Director for Consumer Electronics, Broadband and Video Technology at analysts IHS

“This has the unintended consequence of creating a bottleneck for foreseeable new commercial drone uses and needs,” says Morrod. “In fact, an open and valid question can be raised about whether the civic aviation regulators are truly in the best position to deal with the nuances and complexities of what are really very different uses for drones.”

In the U.S. over 5000 exceptions have been granted for drone commercial applications with a backlog remaining in excess of 7000. In France, IHS charts around 2500 commercial approvals granted, with a further 2000 in the UK. Regulatory ideas have ranged from requiring a full pilot’s license to fly a drone commercially, down to blanket approvals for any commercial use for a nominal fee.

So far, the Federal Aviation Authority (FAA) has approved commercial drones primarily for photography and video (weddings and events being the main use), inspection, and surveying. More specialist uses, such as for viewing real estate, search and rescue, and agriculture, are much less requested and used.

Drones are used by many industries, but media applications seem to get most of regulators' attention.

Drones are used by many industries, but media applications seem to get most of regulators' attention.

“Countries are also struggling to develop an effective and fit-for-purpose method to handle the myriad of requests coming in for commercial drone use,” says Morrod. “An interesting lesson may come from Japan, which is unusual in that the country has long-term regulations regarding drone use in agriculture for crop spraying. These licenses are administered by Japan's Agriculture Aviation Authority instead of the more general-purpose Civil Aviation Bureau, greatly streamlining the process.”

Above all, says the analyst, a substantial learning curve is involved before we see the commercial use of drones reach full potential and before effective regulation can take hold in a complex environment.

“The benefits of drones could be far reaching, allowing for a wide range of menial tasks to be effectively automated—from security patrols to urban delivery, from environmental surveying to carrying materials on construction sites,” says Morrod. “But it will be complex to regulate effectively across all the different needs and uses possible for such devices, and the temptation for authorities may be to resort to very reactive behavior, or to stifle innovation.

“True, the appropriate supervision and oversight of drones is important, especially in light of a series of high-profile accidents and near misses at airports, government buildings, and sports events. Yet it is just as critical for governments to make decisions that will not overly favor corporate interests or unduly give rein to consumer fears that turn out to be unfounded. Autonomous flying vehicles are almost certainly part of our future, but the decisions of governments now will determine how rapidly we get to that future.”

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