The disruption of supply chains and prolonged stay-home policies tied to the pandemic have led to a shift in how we manage business operations remotely. Although drones have long been expected to play a bigger role in this area, the pandemic has accelerated the transition to drone use across various industries, ranging from e-commerce to forestry to finance.
Today, the global market for drone technologies is valued at around $14 billion and is expected to triple by 2024. Rapid implementation of this advanced technology is expected to deliver a significant disruption to such sectors as e-commerce, with deliveries that will become significantly faster and encompass larger swathes of territory.
And it’s not just industries but countries that are getting on board the drone trend. The U.K. government recently announced its early-stage plan allowing drones to deliver goods to rural areas to ensure remote parts of the country are not left behind by technological advancements.
The project includes using electric aircraft to fly passengers short distances, linking transport services into a single app, introducing electric cargo bikes into rural areas and increasing online availability of walking and cycling maps.
In the past, the U.K. was among the few nations worldwide that encouraged the use of drones. Earlier this year, drones were used to transport medical supplies to the Isle of Wight during the first months of the pandemic. The successful application inspired an expansion of drone usage across other parts of the country.
In September, Tesco, Britain’s biggest retailer, teamed up with the drone delivery company Manna and announced a six-month trial program to deliver items by drone from one of its stores in Ireland. The experiment aims to prove that small things could be dispatched to customers within 30 minutes to an hour of ordering.
The U.K. isn’t the first nation that is seeking a wide-scale implementation of drones. Rwanda’s government is the first to introduce drone delivery on a national scale, with a programme that delivers blood products to rural areas.
In 2016, Zipline, a U.S. startup, partnered with the Rwandan government to launch the world’s first commercial drone delivery service. The company has dispatched more than 4000 units of blood products to 12 hospitals.
Witnessing the positive benefits, the Rwandan government decided to rewrite its drone regulations to allow for more significant use and expand the number of drone companies. In 2017, Rwanda partnered with the World Economic Forum to become the first country to adopt a framework of performance-based drone class regulations.
Digital technologies are a breakthrough for forest management and regeneration, even though the forest industry lags behind many industrial sectors according in digitalization.
In countries like Russia, with its vast forestry assets in Siberia and other remote areas that remain difficult to access, drones come to the rescue. In 2017, Russia launched a pilot project to assess forest resources using blockchain technology, including a system of monitoring forest sites with drones – and the forest industry joined the effort.
In one example, Segezha Group, an emerging forestry market player, is developing a unified geographic information system using drones that combines monitoring, collection, processing and updating of information on the state of forest resources. This allows for a new level of control over the movement of forest resources from harvesting to transportation, as well as the accounting of timber reserves.
The United States is also actively developing drone usage. In August, Amazon received federal approval to use drones to supply packages, bringing the company closer to shortening delivery times to 30 minutes or less. Amazon became the third company to receive a Part 135 air carrier certificate, after Wing Aviation, owned by Google’s Alphabet and UPS Flight Forward.
Shortly after Amazon’s announcement, Walmart announced its own effort to supply household goods by drone.
In another example of successful drone use, the investment bank Goldman Sachs has deployed drones to close billion-dollar deals on asset-based businesses during the pandemic. More than 95% of the bank’s deal transactions during this period took place with no face-to-face interaction, part of what the bank’s co-CEO in Russia called a major acceleration of long-overdue changes to financial market operations during a recent panel on the future of work.
Accessibility continues to be the main roadblock to the wide-scale implementation of drones. Many countries, including those in the West, still rely on outdated policies that hamper beneficial drone use and limit the ability to provide timely and cost-effective supplies.
Most governments worldwide continue to regulate drones through legacy approaches that focus on specific equipment requirements. This slows down their implementation, making both private companies and state regulators fighting for the best possible framework.
But as drone usage gains steam in the increasingly digital post-pandemic environment, we will see countries and companies re-thinking their approach and integrating this technology into their operations.