Since Skylogic went out of business, no one has emailed the DJI customer list to ask what share of the drone market DJI has. Does it really matter? It is all semantics now as the other players are just swimming in DJI’s wake, and the end-user (hard to dissuade) is still getting a lot of bang for the buck, or Yuan/RMB as it may be. I know everyone is going to say, but wait, we have some competitive American done companies closing the chasm, and our software is at least two to three years ahead.
The next version of the NDAA is purportedly going to stipulate limits on Chinese parts used in drones. WHAT?! But we can’t source parts here in the US, what are we going to do? You can, but not at the toyshop prices everyone is accustom to. One of the mistakes made by domestic drone companies was the race to the price point bottom. I don’t care if you open an innovation zone in Juarez and a shiny new Tijuana drone factory. You’re never going to beat the Chinese at the consumer electronics game even if you did privateer (crowdsource) your IP.
Well, the good news is that the current presidential administration is aware of the problem and working toward solutions. Drone startups can apply for grants up to five hundred thousand dollars. That is a tangible boost for folks hoping to get new businesses off the pad. I do believe it is a good start. However, I don’t think people completely understand the nuances of this problem.
Don’t say you can’t get domestic sourced parts and components. I just spoke to the folks at Astro Flight Inc., and guess what, they’re still in business and willing to make motors, but they will cost more than $3 apiece. So what is the point, the point is the domestic ecosystem needs support. When folks ask what I think it is going to take, I say probably five or six billion dollars if we want to emulate the success enjoyed by the Chinese. That figure does not include revitalizing the manned aviation sector, but they may benefit some of the benefits of UAS revitalization.
Secondly, the regulatory situation is an unmitigated disaster. I am not dramatic, just stating the facts. The Federal Aviation Administration has been one of the significant variables in the destruction of a once vibrant sector that provided the United States with physical security as well as economic security with a highly skilled workforce.
These capabilities were centralized in advanced western nations, including Europe, but are now being dispersed to other countries besides China, like Brazil, India, Mexico, Pakistan, Singapore, and Turkey, to name a few.
There is a lot of ground to cover, but I will concentrate on the Chinese here, as they are the ones lapping the rest of us in the great drone race. The Chinese have been public enough about their intentions, and I believe historical hubris may have been a factor.
The government of China invests heavily in technologies they determine are relevant for a global superpower in the twenty-first century and beyond. The Chinese employ a long-term public strategy in various initiatives such as the “One Belt One Road,” and “Made in China 2025.” The government understands that there are priority technologies that are essential to dominate for any country aspiring to be the world’s number one economy. Some of these technologies include, but are not limited to, AI, facial recognition, robotics, quantum computing, and of course drones.
The Chinese government invests billions of dollars into a dynamic and innovative ecosystem, including engineering, R&D facilities, housing, manufacturing plants, office space, skilled workers, and resources and reimbursement for PR and marketing. The winners receive further investment. Competing Chinese drone companies will tell you privately that they cannot compete on price point with these frontrunner even though they enjoy the same robust centralized technology ecosystem.
This story highlights how some of the investment works and introduces the possibility that it may not all be manufacturing prowess as some have espoused.
Who could fault a government for striving for these types of goals for its people? On the contrary, they are to be commended if not envied for manifesting such a forward-thinking and nationalistic vision. It would be irrational to blame the Chinese for their abilities and accomplishments. We played our part in it, allowing the FAA decades of regulatory folly without any accountability, the self-indulgence, and greed of the VC community, and government officials riding on the laurels of the past century.
We as a country have only one choice, to accept reality, put the long pants on and come into the 2020s. If we had “leadership,” we would see lobbying for five to seven billion dollars in aerospace stimulus and regulatory streamlining for the domestic industry. This is only one more actionable solution to help bring the American drone ecosystem back online.
@Thedronedealer on Twitter