While the use of drones has proliferated, this emerging technology is yet to reach its inflection point. Regulation has a vital role to play in shaping future innovation and growth, ensuring safety and security, and crucially cementing public acceptance
The market for drones has grown significantly in recent years and is projected to continue to expand due to increasing demand from private, commercial and government users. Greater adoption is also expected to deliver societal, economic and environmental benefits, for example by helping drive business efficiencies and reducing carbon emissions.
To realise the potential, some policymakers have unveiled strategies for drones, while others have committed funding to projects. The UK Government will work with industry to increase commercial drone applications, while the European Commission sees the technology as a key part of sustainable aerial services and transport.
Current drone regulation varies from country to country, as well as between recreational and commercial uses. It is typically a country’s transport regulator that assumes responsibility for drone oversight, with these authorities often facing the challenge of managing friction between well-established and newer market players.
In some countries, regulators have looked to promote innovation, while others have appeared cautious and even imposed restrictions on the use of drones altogether. In the US, the FAA’s safety concerns may have constrained usage, particularly for commercial applications, with test licences difficult to obtain.
To help accelerate the sector’s growth, regulators will be crucial to improving public perceptions of drones, implementing rules relating to safety and security, and enabling trials of different use cases. Telcos will be central to drone operations, with 5G connectivity already being used for use cases such as assisting the emergency services.
Telcos are trialling the use of drones in a range of settings from asset inspection to delivery and emergency services
Drones, often referred to as unmanned aerial vehicles (UAVs), have witnessed a surge in popularity over recent years, with vendors such as DJI, Parrot and Yuneec increasing sales significantly in their domestic markets and overseas. Drones are currently being used for a variety of purposes, including recreational flights, the transport of medical supplies and emergency search and rescue situations. The telecoms sector is increasingly engaged in drone trials, often providing the connectivity that underpins an initiative (see Figure 1). During the course of the decade, the global market for drones is projected to expand considerably due to rising demand from private, commercial and government users, with North America seen as particularly lucrative.
As technology develops and applications multiply, some stakeholders have highlighted the potential positive impacts drones could have on the economy, for instance by creating jobs and realising efficiency gains and cost savings for businesses. UAVs could also support countries’ digital transformation efforts, revolutionising how firms make and receive deliveries, and advancing the creation of smart cities. In addition, BT research has found that almost 70% of the British public believe drones will deliver societal benefits over the course of their lives. While increasing human safety in certain jobs or tasks (e.g. firefighting, inspection of critical infrastructure) is seen as one advantage of drones, many consider that the technology could deliver environmental benefits such as reducing carbon emissions and air pollution.
Policymakers are looking to seize the UAV opportunity
With myriad benefits foreseen, governments and regulators are recognising the potential of UAVs. Some have unveiled national strategies for the future use of drones, while others have committed financial support to certain projects. A BT-led consortium won funding from UK Research and Innovation to test drones and artificial intelligence (AI) applications for ports and highways, including automatic ‘beyond visual line of sight’ (BVLOS) missions that use only sensors and cameras as a guide. BEIS and DfT have recently published a joint ambition statement, which sets out how the UK Government and industry will work together to achieve a 2030 vision for commercial drones – and how they will do so in a way that delivers the maximum benefit while sharing airspace equitably and safely with other users. The statement discusses how technology, regulation, funding, business support and public perception will all be key to realising the potential of drone solutions, with the aim of stimulating new investment into the sector and encouraging widespread adoption.
Across the EU, member states are outlining their ambitions and plans to facilitate lift off of the drone industry within their countries. Poland will distribute €164m of COVID-19 recovery funds to local entrepreneurs, governments, institutions and UAV manufacturers and operators, while Spain has unveiled the 2022-25 National Action Plan for the Deployment of U-space (PANDU). At the bloc level, the European Commission has announced (as part of its Sustainable and Smart Mobility strategy) the intention to adopt a ‘Drone Strategy 2.0’ by the end of 2022 in order to support the safe and efficient development of the EU’s drone ecosystem. This initiative aims to enable drones to contribute, through digitisation and automation, to “a new offer of sustainable aerial services and transport”, while accounting for possible civil/military technological synergies and supporting Europe’s strategic autonomy.
The Civil Aviation Administration of China (CAAC) has published a detailed roadmap for drone industry development over the period to 2035, including proposals to update regulations and expand airspace capacity for civilian UAVs, which could provide a boost for inner-city logistics and eventually long-haul goods transport. The CAAC’s ultimate goal is to enhance China’s competitiveness in this sector and its influence over international civil aviation rules and standards. Australia is yet to develop a national policy for drones, which has been described as a missed opportunity for the country to help scale domestic firms and exports. However, in 2018, the state of Queensland released its own strategy that aims to increase drone investment, R&D and workforce capabilities. UAVs also feature in ACMA’s 2022-23 work programme, where the regulator states that it will contribute to relevant government initiatives and continue to monitor drone licensing requirements.
Regulatory frameworks differ between countries, with some more conducive to innovation
The current regulatory environment for drones can vary from country to country, as well as between recreational and commercial applications. Some policymakers have looked to promote experimentation and innovation (e.g. the UK), while others have appeared more cautious (e.g. the US) or imposed tight controls on the use of UAVs (e.g. North Africa). It is typically a country’s regulator for transport that has responsibility for drone oversight. Authorities often face the challenge of managing friction between well-established and newer market players, which can slow regulatory modernisation and sectoral development. For instance, startups argue that holding drones to the same standards as aeroplanes for Electronic Conspicuity (i.e. the technology that transmits signals about an aircraft’s position) is cost-prohibitive.
China sees drones as one of the future pillars of its economy and the ‘fourth industrial revolution’, alongside AI and 5G, and is seeking to lead the world in developing commercial use cases, electric vertical takeoff and landing (eVTOL), and urban air mobility (UAM) standards and services. China’s drone framework is relatively formalised, while preserving significantly more discretion for national regulators. In recent years, the CAAC – in conjunction with other authorities – has drafted, trialled and finalised regulations for civilian drone use, and also set up sandboxes for the testing of drone systems and operating processes. The CAAC has issued rules relating to licensing and registrations requirements for users, and airworthiness certification, safety analysis and technical guidelines for manufacturers. The regulator’s airworthiness certification scheme, for example, is risk-based, with a higher level of risk resulting in greater CAAC involvement in the approvals process – which could even mean an assessment of a firm’s internal management capabilities.
In the EU, the regulatory framework for drones has evolved, requiring policymakers to rewrite existing national legislation in accordance with Regulation 2018/1139. The purpose of the bloc’s reforms has been to create a harmonised drone market in Europe with the highest level of safety. Common EU rules have been in force since 31 December 2020, which introduce responsibilities for member states, including certifying pilots, implementing a registration system, issuing authorisations, supervising operations and establishing airspace restrictions. Users also face obligations, which in practice mean that once approval to operate is applied for and granted in one EU country, the drone licence is valid across the rest of the region.
The harmonised set of rules also largely applies in the UK (see Table 1), which retained some of the bloc’s regulations following its departure from the EU. There, the Civil Aviation Authority (CAA) has assumed governance responsibilities from the European Union Aviation Safety Agency (EASA). While the CAA’s rules broadly reflect those enforced by EASA, approvals or qualifications to fly drones in the UK are no longer automatically accepted in the EU. If a user wants to fly a drone in a given member state, they must register in that country. Before this, in April 2019, the CAA established its Innovation Hub, which aims to ensure the regulator keeps pace with developments in aviation and helps UK industry to flourish. The CAA has also moved to authorise BVLOS trials at multiple locations, which it considers could trigger “the next phase of growth” for the sector.
Elsewhere, regulators have taken a more cautious approach
Elsewhere, regulators have adopted a strict position on the use of drones, prohibiting both personal and commercial applications. In certain countries in Central America, such as Belize, Cuba and Nicaragua, both uses are forbidden – although they may be possible with the assistance of a local organisation. Similar rules apply in North Africa, including in Egypt, Morocco and Tunisia, with penalties enforced for illegal flights.
In the US, meanwhile, the Federal Aviation Administration (FAA) regulates drones and has put in place rules governing registration, weight of drone, registration and usable airspace, as well as a test for hobbyists. Yet while the country now has over 870,000 drones registered, it has been suggested that the FAA’s safety concerns have constrained take-up and usage, particularly for commercial applications, such as small drone delivery services. Waivers, which are usually given on an ad hoc basis, have been notoriously hard to obtain, with the vast majority of applications unsuccessful.
Encouragingly, following a March 2022 report from the regulator’s Beyond Visual Line of Sight Aviation Rulemaking Committee, there are signs that more widespread operation of commercial drones is on the horizon. The Committee has recommended fully incorporating highly automated BVLOS operations flights into US national airspace, while the FAA has granted temporary waivers to Verizon-owned Skyward and to American Robotics. In parallel, however, the proposed American Security Drone Act could lead to a ban on US Government departments buying drones from Chinese companies such as DJI, which is actively lobbying Congress to block the bill.
Collaboration and connectivity will be two of the key enablers of widespread drone adoption
Despite political support and a wide range of possible applications, a number of barriers will need addressing to unlock the full potential of drones. For example, many consumers still have worries about their use. Concerns could stem from misunderstandings that drones are unregulated, whereas oversight of their applications is actually increasing. To change and/or improve perceptions, effective and coordinated messaging from governments, regulators and industry may therefore be required around the measures implemented and those that are being formulated.
This may be especially true regarding the safety of drones, which will likely present a further challenge. While many people recognise the potential benefits, public acceptance needs cementing, particularly where drones are employed in potentially dangerous scenarios or flown out of view of their pilots. To safely open up the skies, a key hurdle will be ensuring drones can detect and avoid other objects when in flight, while also deploying a traffic management system to prevent collisions. Cross-sector trials in designated locations (as have been conducted for driverless cars) could be a step towards creating new opportunities for safe, autonomous drone flights. In addition, privacy and security – especially regarding personal data and property – have been cited as potential concerns. Enforcing cybersecurity procedures and standards, and compliance with laws such as the GDPR could help encourage responsible use by hobbyists and build support for commercial applications, for example in industrial settings or for long-distance missions.
Though regulation can help tackle these issues, it should not hinder drone development, so will have to find a balance between ensuring appropriate safeguards are in place and enabling trials to occur and innovation to thrive. Given the proliferation in drone companies and users, regulators face a challenge in incorporating all viewpoints into regulation. As a result, progress with devising rules and granting pilot deployments has been slow, for example with respect to BVLOS flights. To accelerate developments, regulators may want to consider a system to fast-track permissions for testing of certain drone operations or trials in confined geographic areas. As a fast-moving sector that is very different from traditional aviation, regulators should also work closely with stakeholders to create proportionate policy frameworks to support future innovation – e.g. passenger drones, or flying taxis, for which injections of capital have soared.
In addition to overcoming certain policy challenges, a focus on technical issues and details is a prerequisite to more extensive UAV adoption. For instance, sandboxes (like the kind seen in the UK) could help test – and convince regulators of – the efficiency and reliability of long-distance BVLOS technology. Quality connectivity (delivered using the right spectrum) will also be a key enabler, increasingly acting as the platform for drone operations. While larger drones used for commercial or military purposes may require access to dedicated spectrum, others are expected to transfer more and more to mobile networks, leveraging the faster speeds and lower latency of 5G networks, which could transform the delivery of existing services such as emergency response. This positions telcos as central to the sector’s future evolution, while regulators too have a role to play in the collaborative effort to support the market’s current growth trajectory and deliver the positive socioeconomic impacts many envisage.
