Game of Drones: As U.S. Dithers on Regulations, Rivals Get yourself a Head Start

This story originally appeared on Reuters

Drones, or unmanned aerial vehicles (UAVs), certainly are a hot ticket in Silicon Valley, but U.S. government dithering over regulations has given overseas companies a head-start in determining how better to exploit them.

Global shelling out for drones could soon add up to near $100 billion over another decade, with commercial uses – from farming and filming to pipelines and parcels – accounting for about an eighth of this market, according to BI Intelligence.

But also for years, the Federal Aviation Administration (FAA), the authority largely in charge of regulation in the usa, has dragged its feet, only last month issuing draft rules on who can fly drones, how and where. It’s apt to be a year or even more prior to the regulations are set up – very good news for companies operating beyond your U.S. and seeking to create a business around drones.

Sky-Futures, a British company that dominates the utilization of drones to get and analyze inspection data for coal and oil companies, says its business soared 700 percent this past year as the normally conservative energy industry embraced the brand new technology. Co-founder and operations director Chris Blackford said the business is coupling drones with software and an improved knowledge of what works in the field, giving Sky-Futures "a head-start over the U.S because we understand pretty intimately the issues facing the coal and oil market, and how exactly we can solve them with technology."

Looser regulations beyond your U.S. have created pockets of innovation attracting ideas, money and momentum, says Patrick Thevoz, co-founder and CEO of Swiss-based Flyability, which builds drones in the spherical cage which allows them to bump through doors, tunnels and forests without losing balance.

Another British company, BioCarbon Engineering, hopes to increase reforestation through the use of drones to plant germinated seeds, and shares in New Zealand-based Martin Aircraft trebled in the first couple of days after listing in Australia last month, on investor hopes for the personalized aircraft maker which is creating a UAV that may be utilized by the military, coal and oil, mining and farming industries.

In Japan, the federal government is seeking to fast track industry-friendly regulation to provide its drone business an advantage.

However the real work, say those in the market, is in building out the drone ecosystem: the payload, software, operator and person, and making sense of the info. That can only come across connecting to potential customers.

"So long as you don’t have the finish user because they can not utilize it, you’re basically missing most of the ecosystem," says Thevoz.

In Singapore, Garuda Robotics has already been moving beyond just being truly a drone operator. "The drones certainly are a means to get the info out of your sky," says co-founder and CEO Mark Yong, "but if you cannot process it you’ve not created any value for the client."

As the company has been helping map the boundaries of palm oil plantations in Malaysia, it has added the opportunity to calibrate the drones’ cameras to measure moisture levels in individual trees. It’s now dealing with agronomists to determine learning to make sense of this thermal data to guage the fitness of trees and their likely yield.

Other projects include assembling real-time 3D maps of creating sites to greatly help construction schedules, monitoring and reducing algae blooms and monitoring packs of stray dogs using infrared cameras.

All this will be hard, if not impossible, under FAA regulations that limit drones flying out of sight of the operator, or during the night.

While regulation typically lags technology, no one’s betting against Silicon Valley dominating the industry over time. Last year, a lot more than $100 million flowed into U.S. drone start-ups, according to CB Insights, double 2013 levels.

"Let’s not kid ourselves," said Philip Von Meyenburg, who runs a drone operating company out of Singapore. "They know very well what they’re doing in the U.S."

And China, too, is in the overall game as hardware prices fall rapidly. China’s DJI sells consumer grade drones for $500, rendering it hard for companies producing lower volumes to justify their higher prices.

"The task for all drone manufacturers now could be that we’re in market that’s constantly updating," said Flyability’s Thevoz.

(Editing by Ian Geoghegan)

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