Glennon J. Harrison
Specialist in Industry Policy
Unmanned aircraft systems (UAS) represent a bright spot for the technology-intensive aerospace manufacturing sector, but military and civil government agencies will likely be the predominant customers for an extended period while such systems are integrated into the U.S. National Airspace System (“national airspace”). Airspace access by commercial UAS users is projected to be much slower than for governmental entities.
U.S. export control policies pose an issue for manufacturers that seek to export UAS. Some UAS are classified as weapons under the International Traffic in Arms Regulations (ITAR), and require an export license approved by the U.S. State Department. UAS are also covered by the Missile Technology Control Regime (MTCR), a voluntary arrangement among 34 member countries to restrict the proliferation of missiles or UAS capable of delivering weapons of mass destruction. Under MTCR guidelines, export of UAS carries a “strong presumption of denial” of an export license. The Aerospace Industries Association (AIA) has stated that advances in UAS technologies have resulted in the development of some systems that are not suited to weapons-ofmass- destruction (WMD) delivery. The association says the regulations will allow nonmember countries (such as Israel or China) to sell UAS with advanced capabilities.
The U.S. Department of Defense (DOD), the major user of such systems, has demonstrated the effectiveness of UAS in Iraq and Afghanistan, but continued development of new systems and capabilities depends on access to the national airspace. UAS spending has been driven primarily by military needs in Iraq, Afghanistan, and other countries where terrorist groups were or are active. Numerous forecasts project that U.S. and global UAS markets will experience strong growth during the next 10 years. A forecast of global UAS demand by the Teal Group shows worldwide annual spending on research, development, testing, and evaluation (RDT&E) and procurement rising from $6.6 billion in 2013 to $11.4 billion in 2022. Total spending for the decade is projected to amount to $89.1 billion.
U.S. aerospace and defense manufacturing firms have a significant lead in military UAS, but Israel is also a strong competitor. Europe, China, and Japan are also expected to press ahead with significant UAS development programs—an area of aerospace deemed critical in terms of defense and industrial capabilities. European manufacturers in particular appear to be focused on potential sales to nonmilitary government and commercial customers.
Many of the U.S. firms that are engaged in UAS research and development and production are privately held companies or small divisions of much larger publicly traded companies. The lack of data on companies, combined with a very limited market for public (i.e., governmental) and commercial users of UAS, makes analysis difficult and speculative. Although the commercial market for UAS is protected to grow, it is forecast to remain below 2% of total global production through 2022.
Date of Report: January 30, 2013
Number of Pages: 8
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