Inside Unmanned Systems

AUG-SEP 2017

Inside Unmanned Systems provides actionable business intelligence to decision-makers and influencers operating within the global UAS community. Features include analysis of key technologies, policy/regulatory developments and new product design.

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AIR MARKET ANALYSIS 20 unmanned systems inside   August/September 2017 "There is agriculture in the forecast but it's less than it was before," Finnegan told Inside Unmanned Systems. Part of the problem is that the algorithms supporting the sector aren't fully developed. Moreover, because the technology still has a ways to go, "some of the earlier adopt- ers may have gotten burned—they didn't get what they were promised in terms of output." Agriculture also lacks the structural ad- vantage of other sectors, like energy, where a handful of global companies can quickly adapt and adopt new technology across all their op- erations—driving rapid growth. "Worldwide enterprises, like for example oil and gas companies, they develop a pro- gram, they examine exactly where the use of the UAS is feasible and they start using it in those areas on a worldwide basis," Finnegan said. "So it has the potential to develop very quickly, worldwide, based on these large en- terprises. You don't have that in agriculture." "Agriculture is potentially a very large market," Finnegan concluded, "but it's going to de- velop relatively slowly." Kara agreed, saying his firm felt some of the early assertions that agriculture would be the primar y market "just didn't ring true." "This is a good example of where, in theory, everything would kind of come together," said Kara. You ture: the huge markets in agriculture and drone delivery. Development in these markets is run- ning slower than in other sectors so their potential largely falls outside of the 10-year forecast period. have private land where the regulatory burdens are less and you have a real need to cut back on the amount of pesticides and other types of chemicals that you put down. "All of that is true," Kara said, "and the tech- nology has improved—but there's still these other gating factors where they're just not interested." Part of that lack of interest is tied to farm commodity prices and some is because small- er farmers are not interested in taking on the technology. "We started going deeper into that and then brought down the numbers considerably," Kara said. While this sector is still "growing pretty robustly in terms of total ecosystem revenue" ABI is going to be re-evaluating the future of that market as well as others including film and media. "We just do not see this evolving in the same time frame or even near what other people are saying after our conversations with people." Betting On the Future However the individual sectors rise and fall, the investors are declaring their faith in the UAS industry with hard cold cash. "The last two full years were a particularly heady one for drone venture capital investment," reported Teal. "The largest 60 companies for venture capital investment brought in three times as much investment in 2015 as the previ- ous year. Investment soared from $155.5 million in 2014 to $486.4 million in 2015. It declined only slightly in 2016 to $454.5 million." As of the spring of 2017 that trend was still holding, Teal reported, with venture capitalists (VCs) in- vesting $168 million in the industry during the first four months of the year. Overall, a total of $1.35 billion in venture capital has been invested from 2012 through the beginning of May 2017 in the 60 largest drone companies targeted by the VCs. " THE TECHNOLOGY HAS IMPROVED— BUT THERE'S STILL THESE OTHER GATING FACTORS WHERE THEY'RE JUST NOT INTERESTED." Dan Kara, research director for robotics, ABI Research 2014 2015 2016 Venture Capital Investment ($ Millions) 155.5 486.4 454.5 $ $ 1.35 billion VC Investments 2012 May 2017 FOR MORE about trends in the UAS industry, read "Industry on the Move," at RELATED STORIES ONLINE Photo courtesy of PrecisionHawk.

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