The global earth observation drone market size was worth USD 9,620 million in 2022. It is anticipated to reach an expected value of USD 17,244 million by 2031 at a CAGR of 6.7% during the forecast period (2023-2031).
Drone technology has grown significantly due to its increasing deployment in challenging and demanding sectors such as oil and gas, mining, search and rescue, disaster management, environmental monitoring, and agriculture in the last few years. Besides the military, commercial, and civil government end-users, the requirement for drones has also diversified to include drone applications in law enforcement, emergency response, and critical infrastructure monitoring, leading to further advancement of compact payload and sensor varieties as well as sensor-agnostic drones.
Drone deployment for cinematography and aerial photography has played a significant role in the overall drone industry, aiding companies such as DJI, Parrot Drone SAS, Insitu Inc., and AeroVironment, Inc. to generate substantially substantial revenues over the years. The Earth observation drone market has been witnessing a high growth rate owing to the significant demand for drones for various applications such as surveillance, emergency response, and inspection of oil and gas fields, power plants, and more. Drones are also widely used in applications like agriculture monitoring, environmental monitoring, and aerial photography.
Increase in Demand for Drones Post COVID-19
The benefits of using drones for various commercial, industrial, and civil government applications have been fully realized during the COVID-19 pandemic, and drones are expected to continue to garner higher growth post-COVID-19. The requirement of robust autonomous systems to monitor civilian social distancing and deliver medicines, vaccines, and other critical commodities were crucial criteria for increased demand. The United Nations International Children's Emergency Fund (UNICEF) identified three key areas where drones were utilized the most: transportation of medical supplies, aerial spraying of public regions, and public space monitoring for lockdown and quarantine.
Dynamic utilization of drones during the COVID-19 period has paved the way for the increasing adoption of drones in various civil-government and industrial applications. These include utilizing drones for infrastructure inspections, such as oil and gas fields, railways, and bridges. The demand for drones and autonomous aerial systems is increasing to conduct solar panel inspections, construction monitoring, etc. To accommodate this demand, countries worldwide have relaxed drone operation regulations to support the Earth observation drone industry. With ongoing regulatory changes and the introduction of technologies such as remote ID and 5G, drone operations will be able to grow exponentially over the forecast period. From single remote-controlled drones to semi-autonomous fleets, which can fly beyond visual lines of sight, drones will be used for myriad applications, including surveying, mapping, and monitoring.
Entry of Multiple Downstream Geospatial Service Providers
The increase in demand for drones for commercial, industrial, and civil government applications has simultaneously created tremendous growth space for downstream geospatial service providers. The Earth observation applications, such as agriculture monitoring, precision agriculture, farming, fishing, disaster management, emergency response, inspection, etc., require dynamic and advanced analytical data to make informed decisions. For instance, monitoring and analyzing soil texture and moisture help farmers take better care of their crops and identify areas that require fertilizers or disinfectants to protect them.
The number of downstream service provider startups entering the Earth observation drones market worldwide has increased in the past five years owing to the increasing use of drones in emerging commercial and civil government applications such as disaster relief, gas pipeline monitoring, and other critical infrastructure inspection. Another crucial factor is the low-economic requirement for establishing services and software-oriented startups. The U.S. alone witnessed the emergence of over 50 startups in the past two years focusing on downstream Earth observation drone services. It includes companies providing drone pilots on-demand basis. However, in a country such as India, the number of startups offering software analytics and downstream Earth observation drone services has increased by 40% since 2019. The demand for advanced software systems is expected to grow worldwide over 2022-2032, leading to more investments in the Earth observation drones market.
Government Regulations for Drone Manufacturing and Sales
Government regulations are one of the biggest challenges for the Earth observations drone market. All countries have aviation and drone regulatory bodies mandating guidelines on operating, manufacturing, and exporting drones and associated drone hardware. For instance, in the U.S., the Federal Aviation Administration (FAA) is responsible for regulating the use of drones. The Civil Aviation Administration of China (CAAC) in China and the Civil Aviation Authority (CAA) in the U.K. are responsible for mandating drone regulations. These bodies may alter the regulations, creating a business challenge for Earth observation drone market players across the globe.
For instance, in February 2022, India banned the import of foreign drones such as DJI. It restricted the use of foreign hardware in drone manufacturing, posing business challenges for international drone sellers. Moreover, before the COVID-19 pandemic started, the drone industry had reached a staggering point due to regulatory challenges. While the pandemic helped countries realize the full potential of drone technology, the regulations concerning sales continue to be challenging. Drone manufacturing experts are currently focused on maintaining the scope of modifying drones if government regulations change. This is mainly because the rules in many countries are still being developed and have yet to be frozen.
Integration of Artificial Intelligence in Drones and Imagery Analytics
With computers, information processing has become massively automated and scalable. The advent of artificial intelligence (AI) has facilitated massive automation of reasoning, or to be precise, solution discovery and parameter optimization. The two operations, i.e., solution discovery and parameter optimization, allow machines to learn independently. Drones utilize AI in various ways, including image recognition and stitching. While these applications fall short of the complete promise of AI, they enable a wide variety of applications to be automated and scaled cost-effectively.
Moreover, introducing AI in drone technology has led to increasing automation of drones and their applications. Drones were first operated manually and remotely, but today's models frequently use AI to automate some or all tasks. Drone suppliers can gather and exploit visual and environmental data by using data from sensors attached to the drone in combination with AI. AI technology has proven to have substantial potential benefits for drone systems. AI has tapped these systems' enormous amounts of data to develop more effective, robust, and precise drone systems.
The global earth observation drone market is bifurcated by application, product, functionality, and region.
By applications, the global earth observation drone market is segmented into environmental monitoring, disaster management, surveying and mapping, search and rescue, surveillance and reconnaissance, industrial inspection and monitoring, agriculture and forestry, and cinematography.
Surveillance and reconnaissance accounted for the largest market share and is estimated to exhibit a CAGR of 6.6% during the forecast period. As border surveillance operations increased, the demand for small and miniature drones for surveillance and reconnaissance increased during COVID-19. In many European countries, persisting refugee and migrant crises have also increased the demand for drones for land and naval surveillance. In October 2020, the European Border and Coast Guard Agency, or Frontex, awarded a contract worth $108 million to Airbus, IAI, and Elbit Systems to operate drones to spot refugees and migrants attempting to cross the Mediterranean Sea to reach Europe. Moreover, powerful nations like India, China, U.S., and Russia are already integrating drones into their existing capabilities, generating market demand.
By end-users, the global earth observation drone market is segmented into military, civil government, and commercial.
The commercial segment accounted for the largest market share during the forecast period. Commercial end-users comprise private corporates, real estate agencies, agriculture industries, private mining energy fields, etc. In the past few years, these businesses and industries have actively started using drones for various critical and hazardous operations that were previously carried out manually. Over the forecast period, the commercial end-users are expected to garner a significant share and growth as government regulations become more relaxed and drones continue to become cheaper. Moreover, modernization in the farming, agricultural, and energy sectors will further generate demand for drones from the commercial end.
The global earth observation drone market is segmented into fixed-wing and rotor-wing drones based on drone type.
The fixed-wing drones accounted for the largest market share and are estimated to exhibit a CAGR of 7% during the forecast period. Fixed-wing unmanned aerial vehicles (UAVs), or fixed-wing unmanned aerial systems, are either controlled by a human operator or fly autonomously using onboard computers. Fixed-wing UAVs generate the lift through their forward motion and wing shape. Fixed-wing UAVs are classified into self-propelled and gilder UAVs or a mixture of both. A self-propelled fixed-mixed UAV generates thrust through a propellor operated by an internal combustion engine or electric motor. In contrast, a gilder is launched by a winch launcher or towed by another aircraft.
Based on sensor type, the global earth observation drone market is segmented into LiDAR, hyperspectral sensor, infrared sensor, electro-optical sensor, Red Green Blue (RGB) sensor, and ground penetrating radar.
The LiDAR accounted for the largest market share and is estimated to exhibit a CAGR of 7% during the forecast period. The term "LiDAR" stands for "light detection and ranging." The sensor is used for remote sensing, which uses pulsed laser light to measure distances on Earth and provide a three-dimensional (3D) image of the survey area.LiDAR sensor is classified into two types, i.e., airborne lidar and terrestrial lidar. Airborne lidar is installed on helicopters or drones to collect data. In contrast, terrestrial lidar is installed on moving vehicles or tripods on the surface of the Earth to collect accurate data. LiDAR technology offers strong performance in various lighting and weather conditions. Hence, it is used in multiple industries such as automotive, UAV/drone, robotics, infrastructure, industrial, and mapping.
Based on region, the global earth observation drone market is bifurcated into North America, Europe, Asia-Pacific, and Rest-of-the-World.
North America is the most significant shareholder in the global earth observation drone market and is anticipated to exhibit a CAGR of 6.4% during the forecast period. The U.S. is a global leader in the Earth observation drone industry. It comprises the most technologically advanced companies and many major Earth observation drone manufacturers, including Airobotics Ltd., Skydio, Inc., Wing Aviation LLC., L3Harris Technologies, Inc., and Lockheed Martin. These companies provide drones for various applications such as Earth observation, surveying, mapping, rescue operations, and inspections. These drone manufacturers are highly active in the Earth observation market by signing several government contracts and agreements and partnering with several national agencies and private organizations. Such initiatives stand to benefit startups and emerging drone manufacturers.
Europe is estimated to exhibit a CAGR of 7% during the forecast period. The countries covered in the Europe region include Germany, Russia, the U.K., and the Rest-of-Europe. The U.K., Russia, Germany, and France have many manufacturing, research, and development hubs to develop innovative solutions for market needs. Europe is the second-largest region for the growth of the drone manufacturing market for the Earth observation application. Europe has several vital companies, such as Parrot Drones, SenseFly, and Wingcopter, that provide drones to companies worldwide. The region's drone sector is highly driven by automation and artificial intelligence, cheaper hardware, and increasing research and development investments. The governments in the region maintain a balance between the civil and commercial drone programs aiming to facilitate the growth of Earth observation drones in the area.
Asia-Pacific is the third largest region. The Asia-Pacific region (APAC) comprises the regional markets of China, Japan, India, and the Rest-of-Asia-Pacific. The Earth observation drones sector in Asia-Pacific is growing as the region's major economies have been gradually accelerating toward a strong growth pattern, along with economic booms in the Asia-Pacific region. The countries in this region are increasingly producing Earth observation drones, which is expected to promote the growth of advanced Earth observation applications.
Additionally, India and China-based drone companies drive the increase in the region. China has manufactured high-quality, low-cost Earth observation drones and sensors for several years. For instance, in September 2021, DJI and drone data visualization company Propeller Aero extended its partnership to add the compatibility of Propeller's site surveying and 3D mapping software to DJI's Matrice 300 RTK drone (M300) and Zenmuse P1 sensor (P1). However, in India, multiple startups are emerging and working toward making India a hub for drone innovation. Government support is also playing a significant role in the growth of the Earth observation drone market in this region.
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