Drone industry growth won’t be as big as we thought, according to slightly disappointing results from the latest Drone Market Report 2021-2026 from German analytics firm Drone Industry Insights.
The team’s annual report seeks to project what the drone industry will look like over the next five years. And we’ll start with the optimistic news: the drone market is set to grow at a 9.4% compound annual growth rate, reaching $41.3 billion by 2026.
But now for the bad news: that’s less than the projections made in last year’s version of the same report. In that study, DII projected that the drone industry would be worth $42.8 billion by 2025. And what’s worse, that’s already “a less optimistic picture than what (the firm) saw in 2019,” according to their report.
Going back to the 2019 predictions for 2024, the firm said they believed the drone industry would grow to be worth $43 billion by 2024, which would have been a compound annual growth rate of 20.5%.
Perhaps to no one’s surprise, the blame for this lackluster growth outlook is being placed on the impact of the COVID-19 pandemic.
Where is most drone market growth?
Most of the upcoming drone market growth is centered around Asia, which is expected to grow to $16.5 billion on its own. But don’t overlook South American countries and India. The South American market is expected to grow at a compound annual growth rate of 11.3%. Much of that growth is being led by Brazil and Argentina. Brazil’s National Civil Aviation Agency has been fairly bullish on drones, especially when it comes to issuing approvals for companies to conduct certain BVLOS flights to be carried out around the country.
And India is set to see astonishing growth of 20.6%. Among the companies leading the way in India include food delivery giant Swiggy, which has partnered with ANRA to use its SmartSkies CTR airspace management and SmartSkies DELIVERY platforms to deliver food via drones to customers.
According to DII, that “fits with the idea that many developing countries will start benefitting more and more from drone technology.”
Why you should still be optimistic about the future of drones
“This is still a relatively stable growth,” DII’s report stated.
Look to job growth as an indicator: Some other good news: drone companies continued to grow through the past year, with drone companies increasing their staff by 15%, on average in 2020.
Don’t overlook investments either: Last year also saw a record number of investments in the commercial drone space. That’s almost double the $1.3 billion that was invested in 2019, which had already been a record on its own.
“Therefore, it is clear that a lack of economic activity in markets did not scare investors away from drone technology,” according to DII. “Perhaps investors saw how drones can help drive the remotization of work and streamline business processes.”
It’s all relative: DII also put the drone market outlook into further context, comparing it to the global helicopter market, which is currently valued at $48.2 billion by Statista. “Drones will likely reach this number within a decade even though helicopters have been around for much longer,” according to the DII report.
And DII even admits their report might not be entirely on point, if the optimists have their way.
“If drone companies capitalize on the increased investments and positive attention to drone technology, then the industry could profit from the often-cited K-shaped recovery and grow even faster than our data suggests.”