In other words, PwC sees drones as being pretty disruptive to a lot of different industries.
It’s briefing document on the technology is actually pretty useful if you’re looking to understand a bit more about how drones, or unmanned aerial vehicles (UAVs), could be used across infrastructure projects, as transport for e-commerce goods, for risk assessments in the insurance industry, as interceptors for more targeted advertising, as maintenance tools, as transport for medical equipment delivery, for crop supervision and of course for security.
Drones are incredibly useful for transportation, for collecting data, for transmitting data, for accessing hard to get areas quickly and for delivering goods. Any industry where you can think that this would be useful, at a low cost point, it’s likely that drones will play a role in the future.
PwC is so convinced by the potential of the technology that it itself has set up a global centre of excellence in Poland that uses drones and data analytics to help clients solve business challenges.
Michal Mazur, partner and head of Drone Powered Solutions at PwC for Central and Eastern Europe, said:
We are currently in discussion with several major companies from a wide range of industries about how they can use drones to improve their business processes. This got us thinking about the potential value of the global drone-powered solutions market. With an estimated market value of over $127 bn in commercial applications, drones are making the transition from novelty item to indispensable business tool.
However, as one would imagine, despite the evident commercial use cases, there are a number of challenges in getting to the stage where businesses can safely fill the skies with thousands of drones.
There are essentially four main barriers to widespread commercial drone adoption that PwC breaks down within its report. These are the safety of drone operations, privacy issues, insurance coverage availability and regulatory frameworks.
It’s unsurprising that safety is a top priority for those ensuring the widespread adoption of drones, given that the thought of thousands of unmanned vehicles flying around in the sky will likely make many citizens feel somewhat uncomfortable. PwC describes this as “the most urgent challenge” facing national aviation authorities and the private sector.
The report highlights how mandatory drone registration will be introduced as part of a secure supervision system, but more importantly a complex air-traffic management system will need to be created. PwC says:
Such systems have to allow UAVs to see and avoid other aerial vehicles and potential obstacles, as well as communicating with air traffic controllers of manned vehicles. In addition, those systems have to be integrated with national air traffic management systems for manned aviation, to ensure the flow of information.
Moreover, drones have to possess auto-fail functions, preventing an uncontrolled fall from the air to the ground. Leading manufacturers are now implementing such functions in most models, sometimes even coupling them with autonomous obstacle detection systems.
PwC believes that these solutions will become the industry standard, and over time national and international authorities will create a unified system for air traffic control of drone operations.
Of equal importance, PwC highlights the privacy issues that come with mass adoption of drones, given that they are capable of collecting vast amounts of data, which sometimes include confidential or sensitive information about private property or private behaviour.
PwC notes that due to a “very broad” definition of personal data, it isn’t clear how companies should store these data, what types of data shouldn’t be collected, or how individuals and companies can defend their privacy rights.
This obviously also ties into the the debates surrounding the bulk collection of data by internet service providers, following the Snowden leaks. All of this needs to be hammered out in the courts and by legislators, but no clear guidelines have yet been established or solutions proposed.
However, PwC says:
Market growth increases the pressure to regulate this area, though it will take time to prepare and pass proper legislation. This shouldn’t be a major factor preventing further adoption of drone technologies, just as it wasn’t in the case of telecommunication, internet and mobile technologies.
I’d argue though, that perhaps we are a bit more aware of the value and accessibility of our data now than we were when the broader adoption of the internet and mobile took place.
PwC also points to the insurance industry as a barrier to businesses realising the benefits of drone adoption, as the insurance industry is still largely figuring out how it can cover unarmed aviation vehicles. This is despite the fact that in most countries, aircraft users are required to have insurance to operate them.
The report notes:
The laws on UAV operators are still evolving, and insurance will become part of the complex regulatory framework. It is expected that insurance will be one of the main factors influencing risk management frameworks for drone technologies, in order to provide coverage for risks of physical losses or liabilities during and after drone operations.
However, getting to the crux of the problem, PwC addresses the fact that national and internationallegislators are “struggling to keep pace with advances in UAV technology”, as drone regulations have changed in recent years to being treated as a niche hobby, to becoming part of regular aviation operations.
Some national authorities have started developing special regulatory frameworks to address the most pressing issues, says PwC, giving you an idea of the importance of getting this right.
The report sums up the challenges by saying:
For UAV operations to be commercially viable, national and international aviation laws may need to be overhauled, and a set of international regulations developed, to take UAV use into account in a consistent way. The ICAO (International Civil Aviation Organisation) is currently working on guidance for UAV operations, but the process is expected to take some time.
The organisation plans to complete its standards and recommended practices by 2020, with a clear goal being a regulatory infrastructure for air-traffic management and sense-and-avoid technology. It is also expected that a manual for UAV operations will be published in 2018, ahead of the standards.
Another important aspect in regulating drone usage is the issue of privacy. While performing drone operations over populated areas, companies and governments can collect vast amounts of information, including data about private property, behaviour and other sensitive data. It is the responsibility of UAV operators and system providers to secure this information and to prevent misuse or theft.
The core expertise of aviation regulatory agencies is safety, not privacy, and at least in Canada, Australia, and the US, aviation authorities don’t engage in the regulation of privacy issues. The US Congress has already begun work on legislation to prohibit drone operators from capturing data in ways that would violate a reasonable expectation of privacy.
Other proposed legislation would require drone operators to submit a “data collection statement” to the FAA, delineating information including what data will be collected, how it will be used and retained and whether the data will be sold to third parties. It is far from clear how other countries will try to manage this issue.
Plenty of opportunities for the enterprise and businesses should be looking now at how drones could help not only introduce efficiencies into their current operations (the cost point of a drone can be significantly cheaper than alternatives), but also at how new business models could be introduced as a result of the technology.
However, underpinning all the barriers is the issue of regulation. And to get this right will require international cooperation amongst all the stakeholders at play. Getting this right will not only be critical to the safety of drone operations, but also the privacy of citizens.