As of September 1, the Federal Aviation Administration (FAA) had issued 1,407 so-called Section 333 exemptions to U.S. companies, clearing them to operate drones for commercial purposes. Presently the aviation authority issues about 50 Section 333 exemptions per week in an attempt to stay ahead of the thousands of applications it’s received since last year.
In a report issued this week, the Association for Unmanned Vehicle Systems International (AUVSI) breaks down data surrounding the first 1,000 drone permits by state, offering a far more granular view of the U.S. commercial drone industry than we’ve seen to date.
Their report found that commercial operators now fly in 49 states, using vehicles manufactured in 22 states. An overwhelming 85% of companies holding Section 333 exemptions are small businesses. Applications span a variety of industries, but are largely tied to aerial data gathering. However the states with the most companies operating commercial drones aren’t just the biggest states, but territories with major aerospace and aviation industry hubs, like California, Texas, and Florida.
“It’s encouraging to see the UAS industry benefiting from every corner of the country, with manufacturers located in almost half of the states,” Brian Wynne, AUVSI’s president and CEO, says. “These figures will likely become even more apparent when the FAA finalizes its small UAS rules, which will allow companies to fly without having to go through the exemption process.”
The UAS rules are a set of new FAA commercial drone regulations expected sometime in the first half of next year, which will replace the current case-by-case approval process now under Section 333. While the current Section 333 process may be onerous for the industry, it offers a unique opportunity for the FAA and groups like AUVSI to gather data on how and where commercial drones are being deployed, as well as what kinds of companies are using them.
The big winner in AUVSI’s breakdown of the data is unsurprisingly California, home to 114 approved commercial drone operators. The first six Section 333 exemptions granted last year went to companies in the film and television industry, an industry that accounts for roughly 9% of the first 1,000 exemptions granted nationwide. The Bay Area is home to several of the U.S. drone industry’s most visible players, including Skycatch, DroneDeploy, and 3D Robotics. The state’s vast agriculture industry has also provided a fertile testing ground for many new drone technologies as everyone from almond growers to vineyard owners looks to new means of minimizing water usage while maximizing quality and yield. Agricultural applications account for 164 of the first 1,000 commercial drone permits, and AUVSI expects data-driven farming to be a leading growth driver for the drone industry.
Florida and Texas follow California in number of commercial drone operators, with 97 and 82 Section 333 permits respectively. Like California, Texas is also a big state with lots of real estate to survey, lots of agricultural data to mine and lots of golf courses to advertise. The real estate industry accounts for roughly 35% of the first 1,000 commercial drone permits, followed by “general aerial surveying,” a kind of catch-all category for non-specific aerial inspection of land or property, at 30%.
But more telling than the data surrounding these top three drone states is the relatively wide, relatively even distribution of Section 333 permits across the other 47. Every state in the U.S., with the exception of Delaware, now boasts at least three commercial drone operators, and most are home to a dozen or more. While a dozen operators here and there doesn’t necessarily spell boom times for the commercial drone industry, it’s worth noting that the FAA has more than 1,000 applications it hasn’t even reviewed yet, with more piling up every day.
The most interesting data in AUVSI’s analysis has nothing to do with the state-by-state breakdown and everything to do with the kind of companies applying for commercial drone permits nationwide. “At least 84% and as many as 94.5% of all approved companies are small businesses,” the report says. This is partially a reflection that the majority of businesses in the U.S. are small businesses, Wynne says. But there’s more to it than that.
“Many of the low-risk operational profiles permitted by the exemptions, such as aerial photography, apply well to small businesses, such as real estate and photography,” Wynne says. “In many cases, large companies are testing UAS in countries with more established risk-based, technology-neutral regulations, such as Canada and Australia. Larger businesses are mainly focused on more complex operations than are currently allowed by the exemption process.”
This news is both good for small business operators and a sign of what’s to come for the larger commercial drone industry. AUVSI has previously predicted that drones will generate $82 billion in economic impacts (and 100,000 jobs) in the decade following the implementation of comprehensive commercial drone rules. However, as long as U.S. commercial drone regulations remain in limbo, Wynne says, larger companies like Google (GOOGL) and Amazon (AMZN) will continue to develop their drone technology elsewhere.
“In order to continue reaping the economic benefits that [unmanned aerial systems] offer, we need to do all we can to support the growth and development of this industry by providing clear rules for those who want to use UAS,” Wynne says. “But the longer we take, the more our nation risks losing its innovation edge along with the billions of dollars of economic impact.”
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