Soaring U.S. drone market under fire

Manufacturers of unmanned aircraft have seen the value of their market soar to more than $5bn in just a few years as the Pentagon and the CIA have increasingly relied on drones in the mountains of Afghanistan and Pakistan and in the deserts of Yemen.

But what was seen recently as an even bigger commercial prize, using drones for anything from helping police in the US find lost children to delivering tacos, is now under threat even as the domestic market is on the brink of taking off. The drone industry is facing a backlash in scores of US states over privacy worries.

With demand from the US military potentially reaching a plateau, drone manufacturers are gearing up to sell to domestic customers when commercial airspace opens up in 2015. It is a market which executives hope will be worth tens of billions of dollars.

According to the Teal Group, an aerospace and defence consultancy, the global market for drones – or unmanned aerial vehicles (UAVs), as the industry calls them – is likely to double over the next decade from $5.2bn to $11.6bn by 2023 – although only a small part of that growth is now expected to come from commercial buyers in the US.

Congress decided last year that drones should be integrated into US commercial airspace from 2015, opening up a vast potential market for the industry, even though many of the rules surrounding domestic use have still to be established.

Proponents say drones could play a vital role in public services, including monitoring hurricanes, and have the potential to transform a number of industries, including cargo delivery and agriculture. More than 20 states are vying to host one of the planned six test sites for the domestic use of drones, believing the industry could be an important source of new, well-paid jobs.

However, the political revolt against government surveillance that the Edward Snowden leaks have helped to spur has exacerbated already strong fears about the risks to privacy from extensive use of drones in US airspace.

Dozens of states have proposed bills to limit the use of drones – restrictions that some industry executives believe could stifle the potential domestic commercial market at birth. More legislative efforts are expected in the coming months as anxieties grow.

“These [privacy] issues are all coming to a head right now and unfortunately they are all being directly tied to UAVs,” said Michael Toscano, president of the Association for Unmanned Vehicles Systems, the trade group for the drone industry.

Jay Stanley, an expert on privacy and technology at the American Civil Liberties Union, said the political battle lines over drones were the same as over the NSA. “If common sense privacy protections are put in place, then we will see lots of cool new uses for this technology.”

Alan Frazier, deputy sheriff of Grand Forks county in North Dakota and one of the pioneers of using drones in law enforcement, said some of the proposals from state legislatures were equivalent to introducing wiretapping laws even before telephones were used.

“They could have a chilling effect on the development of this technology,” he said. “If we do not get the public to agree to its use, we could fail before we even get out of the gate.”

Greg McNeal, a law professor at Pepperdine University, who believes the industry is “in denial” about the likely impact of privacy concerns on sales in the domestic market, said: “Drones have tapped into a vein of paranoia that the general public has about robotics.”

“Some of these bills could kill off the potential use of drones,” he said.