Civil Unmanned Aerial Systems (UAS) will be the most dynamic growth sector of the world aerospace industry this decade as commercial applications take off and civil governments adopt systems for new roles.
“The foundations for rapid growth are being laid,” said Philip Finnegan, Teal Group’s director of corporate analysis. “Venture capital investment in the sector has soared and technology giants increasingly envisage drones as part of their future. Regulators are loosening airspace rules. Governments are turning to UAS to monitor borders and provide public safety.”
Teal Group’s 2019 World Civil UAS Market Profile and Forecast projects that non-military UAS production will total $88.3 billion over the next decade, soaring from $4.9 billion in 2019 to $14.3 billion in 2028, a 12.6% CAGR in constant dollars. The study includes forecasts of commercial, consumer and civil government systems. Teal Group supported the FAA in the preparation of its commercial UAS forecast.
Commercial use will surpass the consumer drone market in 2023, becoming the largest segment. It will grow more than eightfold to reach $9.5 billion in 2028. “The growing promise of the civil market is attracting the world’s leading technology companies, driving ever faster development of systems and business applications,” said Finnegan, the study’s author. “As corporate clients move from proof of concept to fleet deployment the market will soar.”
Civil governments are deploying an increasing number of systems. The U.S. and European governments have new pilot programs for protecting land and sea borders. The UN and other peacekeepers are deploying protection systems.
Firms in aerospace, data analysis, semiconductors and telecommunications are driving the diverse market. Venture capitalists and companies like Intel, Qualcomm, Microsoft, Apple have poured $455 million into drone startup investments in 2018 ($2.6 billion since 2012). U.S. start-ups received 67% of the total, enabling them to take the lead in drone analytics. Chinese firms (15% of total investment) are focusing on continuing their lead in hardware, moving from consumer to commercial systems. Europe lags at 9%.
While funding still goes for new drones focused on specialized markets, increasingly the venture capital funding is shifting from hardware to software and services that will make drones more useful. Funding is being used to develop the scale needed to serve large corporations.
As a market segment, industrial inspection will lead the commercial market over the next decade. Construction will be the largest segment of industrial inspection. All 10 of the largest worldwide construction firms are deploying or experimenting with systems.
Agriculture, the most established commercial market thanks to Japan’s use of high value spraying UAVs, has tremendous potential, but will grow more slowly than other sectors. It still will rank second to industrial inspection.
Teal Group is an aerospace and defense market analysis firm based in Fairfax, Virginia, USA.