The Impact of the Top 3 Strategic Imperatives on the Global Commercial Drone Regulatory Framework

Geopolitical Chaos

Why:

• The use of widely available commercial/hobbyist drone platforms for warfare in the Russo-Ukrainian war is generating concern among regulators.
• While Chinese drone manufacturer DJI has stopped commercializing its platforms in both Ukraine and Russia in response, drone systems are still being smuggled into the countries.

Frost Perspective:

• Remote ID rules have recently come into force in the United States and the European Union. These rules will ensure a smooth identification of drone systems in public spaces, helping guarantee their safe usage.

• Regulations will prioritize limiting the use of heavyweight drones because they could potentially be the most dangerous in urban areas.

Disruptive Technologies

Why:

• Enhancements in artificial intelligence (AI) technology are helping enable the use of autonomous features on drone systems.
• However, regulators are struggling to keep up with new features being added onto drone platforms.
• This is making end users reluctant to integrate newer technologies into their platforms because most are uncertain if these are allowed by regulations.

Frost Perspective:

• In countries where there are strong lobbies in place, such as the United States, industry participants will pressure governments to adopt regulations.

• Drone businesses are expected to collaborate with regulatory bodies by providing information collected by integrating new technologies into existing workflows, demonstrating how safe they are to the public.

Transformative Mega Trends

Why:

• Pledges by several countries around the world to reduce carbon emissions are driving governments to seek alternatives to conventional vehicles.
• Businesses are increasingly adopting sustainable practices in an attempt to reduce their carbon emissions and gain public favor.

Frost Perspective:

• As drone technology improves and the safety of new functions is proved to regulators, regulatory frameworks will adjust to accommodate the adoption of this technology.

• Pressure to fulfill the pledges will intensify within 5 years because governments struggle to keep down emissions.

Research Scope

• The content is not a competitive analysis but presents information concerning developments in regulations that affect the commercial drone industry.
• The regions that represent the biggest market for the commercial drone segment are the United States, Europe, and Asia-Pacific (APAC).
• Enhancements in AI algorithms are enabling the use of autonomous drone features. However, existing regulations do not take into account autonomous use cases because of security risks, which inhibits end users from fully leveraging this technology.
• One of the biggest obstacles for end users is that regulators do not contemplate the needs of each commercial segment when regulating.
• As a result, commercial applications that rely on activities in urban areas, such as inspection of urban infrastructure, are growing at a slower phase.

Growth Drivers

• The increasing enforcement of remote ID requirements for drone platforms is giving authorities the required tools to monitor drone operations closely to ensure safe usage in populated areas.
• The need to reduce carbon emissions is driving governments to recognize the potential use of unmanned systems in reducing emissions in the commercial segment. This is particularly true in segments where conventional workflows are making commercial practices environmentally unsustainable, for instance, in the oil and gas sector.
• Growing public acceptance is making regulators more likely to offer waivers for commercial drone use in urban areas where civilians are aware of the benefits of this technology. Thanks to these waivers, commercial drone end users can fully leverage drone technology without having to worry about regulatory restraints related to flying over people or long distance.

Growth Restraints

• Rapid advancements in AI are making autonomous drone workflows a reality. However, most regulatory frameworks do not contemplate the use of fully autonomous features, largely in part due to the reluctance of authorities regarding their safety.
• The use of commercial or hobby drones for warfare in the Russo-Ukrainian war has made many governments reluctant to enable their use in urban areas because they could potentially be used to carry out terrorist attacks.
• Drone regulations do not take into consideration the different needs of each commercial segment, putting commercial sectors that rely on BVLOS operations at a disadvantage because most regulations require end users to obtain a special waiver for these missions.