CRS – Unmanned Aircraft Systems (UAS): Commercial Outlook for a New Industry. Bill Canis, Specialist in Industrial Organization and Business, September 9, 2015.

“Unmanned aircraft systems (UAS) — commonly referred to as drones — have become a staple of U.S. military reconnaissance and weapons delivery in overseas war zones such as Afghanistan. Now some new technologies and pending federal regulations are enabling the manufacture and use of UAS in domestic commerce, giving rise to a growing commercial UAS industry. Flying small, unmanned aircraft has been a hobbyists’ pastime for decades. However, the Federal Aviation Administration (FAA) currently prohibits the use of UAS for commercial purposes, except where it has granted an exemption permitting specific activities. FAA has granted such exemptions since May 2014, primarily to firms wishing to use UAS for agricultural, real estate, film and broadcasting, oil and gas, and construction activities. As of September 2, 2015, it had granted more than 1,400 such exemptions. FAA also has authorized limited use of UAS within defined areas of Alaska, as required by the FAA Modernization and Reform Act of 2012 ( P.L. 112 – 95 ). Around 89 companies in the United States now produce UAS, which can range from hobbyist planes that fly on a single charge for about 10 minutes and cost under $200 to commercial-level craft that can stay aloft much longer but can cost as much as $10,000. Manufacture of the aircraft, known as unmanned aerial vehicles ( UAVs), is relatively simple. The aircraft’s basic elements include a frame, propellers, a small motor and battery, electronic sensors, Global Positioning System (GPS),and a camera. Some UAVs are operated by controllers, but others can be guided by the operator’ s smart phone or tablet. The widespread availability of electronic sensors, GPS devices, wifi receivers, and smartphones has reduced their cost , enabling manufacturers to enter the market without worrying about the supply of components. It has been estimated that, over the next 10 years, worldwide production of UAS for all types of applications could rise from $4 billion annually to $14 billion. However, the lack of a regulatory framework, which has delayed commercial deployment, may slow development of a domestic UAS manufacturing industry..”