“The North American drone market is not only already one of the leading regions for drone technology, but also has incredible potential to grow even further.”
This is the subject of a new report from German-based analytics firm Drone Industry Insights. DII conducts a large-scale annual survey of drone pilots, company leaders, and others involved in the industry. This year's survey drew on data from 1,113 online survey respondents from 85 countries. According to insights gathered in the latest Drone Mark Report 2023, the North American drone market is expected to grow.
Drone Industry Insights looked at three North American countries – Canada, Mexico and the United States – to understand the trajectory. Here are some highlights:
- By continent, North America is the second largest drone market after Asia.
- According to another DII report, the North American drone market is expected to exceed $12.2 billion by 2030.
- 59% of North American drone companies have 10 or fewer employees (considered small companies).
- 19% of North American drone companies have between 11 and 50 employees (considered midsize).
Reasons to look forward to the North American drone industry in 2024
So why is the North American drone market likely to see an upward trend? Take a look at DII’s ‘Drone Industry Optimism’ analysis. While the average industry optimism score is just 6.6, the average for North American respondents in particular is much higher at 7.2.
Moreover, when DII collected the optimism score from North American drone companies in 2022, it was only 6.3. This year's score of 7.2 represents almost the entire point of increase.
There are several key reasons for the rising optimism, but one of the biggest is recent developments in the regulatory framework. A large part of that is because the Federal Aviation Administration (FAA) is increasingly authorizing companies to conduct drone flights beyond visual line-of-sight (BVLOS). This includes an October 2023 approval for SwissDrones. The approval allows aviation service provider Phoenix Air Unmanned (PAU) to fly drones across the United States, not just specific regions. A month ago, two drone delivery companies, Zipline and UPS Flight Forward, received FAA approval to conduct package deliveries.
Additionally, the FAA has begun issuing Production Certificates for drones. This is essentially a stamp of approval from the FAA that a manufacturer holding such a certificate has demonstrated the necessary quality control and manufacturing capabilities to produce an aircraft of that design. Matternet will become the first U.S. company to receive FAA production certification in late 2022.
“These regulatory developments are critical to creating a favorable environment for drone technology growth and innovation,” according to DII’s report.
What does the North American drone market look like today?
The North American drone market is very diverse in terms of products. There are companies that build drones and related components (like parachutes), but business ventures extend beyond that. Here are the types of drone companies you can find in North America: They are classified by their share compared to other types of companies.
- Drone service providers (40%)
- Software companies (12%)
- Training and education providers (11%)
- Internal Operations (9%)
- Hardware companies (6%)
- Component and system manufacturers (5%)
- Engineering and Integration (4%)
- Other (13%)
The majority (40%) of North American drone companies are drone service providers. This is a pretty broad term, but simply put, what it means is that these companies will fly the drone for you. This could include anything from California-based Zipline, which performs drone deliveries for customers including Walmart, Intermountain Healthcare, and even Sweetgreen. It then includes smaller startups like Aerotas, which uses drones to process data relevant to land surveyors.
DII categorized drone hardware companies (6%), component and system manufacturers (5%), and engineering and integration (4%) into separate categories, but it might be fair to group them all together. From this, we can infer that 15% of the North American drone industry is focused on some type of hardware. Most drone hardware companies producing in the United States today are focused on corporate and military applications. These include manufacturers such as Skydio (California-based) and Teal (Utah-based).
Then there are the powerful, and perhaps unsurprising, software companies, considering a software hub like Silicon Valley. Major software companies there include DroneDeploy, which makes mapping software. Other types of drone software include drone simulators, such as Zephyr Drone Simulator from Virginia-based Little Arms Studios.
But perhaps most striking is that 11% of North American drone companies are training and education providers. There is a tremendous amount of training available in North America. Take a look at the numerous Part 107 online test preparation courses or any organization that offers training for GI Bill students.
What challenges lie ahead for the North American drone market?
Currently, the biggest priorities and challenges for U.S. drone companies are focused on marketing and sales. Of course, people are generally more open to drones than they were 10 years ago, when concerns about drones spying on them or crashing into their heads were most prevalent. But despite this, many people are not entirely pro-drones.
Fortunately, the ongoing examples of ‘drones for good’, especially in people’s everyday lives, are changing this situation. For example, more drone light shows have exposed the beauty and power of drones to the public.
Survey respondents also ranked ‘employee development’ as a top priority. This fits well with the fact that 11% of North American drone companies are committed to training and education.
And perhaps it is not surprising that, despite regulatory improvements that bring renewed optimism, this remains the biggest challenge. Among these regulatory challenges is the rollout of remote IDs. That rollout has been so difficult that the FAA has extended the Remote ID implementation date until March 2024. Even today, drone pilots criticize the fact that they have to buy expensive remote ID modules or are often limited to flying in certain areas (FRIA). ) The number is very small.
But in general, it seems like a good time to be a drone company in the United States. Demand for American-made drones is high. There is also high demand for faster deliveries via drones, drones for cleaning rooftop solar panels, drones for filming homes for sale, or more drone light shows. With that in mind, now is a great time to be a North American drone company.