What happened to the drone industry during the pandemic?

It is now official – the year 2020 was terrible for humans. It was great for drone business.

With the benefit of hindsight, we know we would have done a lot of things differently in that December of 2019 when the first cases of Coronavirus were reported, and maybe we would have avoided the pandemic locking us indoors for more than a year now.

But que sera sera and all that. We are where we are right now, and we have to applaud just how much drone technology stood up to be counted among other heroes of the pandemic. Of course, they did not invent vaccines, but they are playing a part in distributing those inoculations, especially in Africa, which for a rare moment has had a swell time being a testing ground for modern technology.

Other industrial drones have done their part in the last year by flying into dizzying heights on cell towers, into claustrophobia-inducing sewers and mine shafts so that humans stayed safe on solid ground.

The report below from Drone Industry Insights analyses the year 2020 in terms of how drone technology developed in the face of adversity almost everywhere else in life.

How did drone companies develop in the pandemic year 2020?

The drone market has grown steadily and continuously over the past several years. The technology is here to stay and is becoming more prevalent across numerous industries.

But 2020 was a unique year due to Covid-19; we saw and still see many companies around the world from a wide variety of industries struggling from the impact of COVID-19 induced lockdowns and shutdowns of the economy.

Drones have been one of the few exceptions to the 2020 rules.

In mid-2020, our survey of the impact of the pandemic on companies in the drone industry in our Drone Industry Barometer showed that some drone companies faced problems such as a decrease in demand and layoffs.

On the other hand, some companies in the industry indicated an increase in demand and other positive effects on their business. Overall, respondents even felt that the changes in business models triggered by the lockdowns would actually have a positive impact on the drone industry in the long run. Now that 2020 ended, we tracked the founding date and company size development of more than 1,000 companies whose core is the drone business across a wide range of industry sectors. Additionally, the drone companies were classified into start-ups, small companies, medium companies, and large companies to show how businesses of different sizes were affected.

Drone companies increased fifteen percent in size in 2020

On average, the companies grew by fifteen percent in personnel, which corresponds to an increase of eleven percent of the total drone industry workforce.

In the field of software, the average increase of drone companies was the highest at 20 percent. At the same time, this segment was the only one which saw a decrease by -0.4 percent in total workforce. Within the software segment, companies in the fields of flight planning, fleet and operation management and developers of Unmanned Traffic Management (UTM) systems grew more strongly than those involved in data analysis. In the latter, only a total increase of two percent was recorded, where the gap between growing and downsizing drone companies was particularly large.

Hardware companies also fared well, recording an average increase of eighteen percent, primarily propped up by larger drone companies. As a result, the total number of new employees was also significantly higher at sixteen percent. Passenger drone manufacturers grew particularly strongly. These saw large investments in the last two years, which allowed them to grow rapidly. Commercial drone manufacturers grew at about the industry average at fourteen percent.

In the service sector, companies were only able to grow by an average of eleven percent, which corresponded to an increase of eight percent in the total number of employees in this sector. Here, it was again the larger drone companies that tended to show stronger growth.

There was also a lot of volatility in the service sector; while some companies in areas such as consulting and advisory or marketplaces for drone footage grew much below average, other areas such as news, blogs and magazines performed significantly better. The largest sub-segment by far, the Drone Service Providers (DSPs), grew more or less in line with the market. Here, it was primarily the larger DSPs that grew more strongly.

Drones Industry Insights drew a graph with bars and numbers to show how much the drone industry grew during the pandemic

More and more companies are entering the drone market

In addition to the development of company size, the year in which drone companies were founded was also analysed. Here, there has been a significant increase in new companies founded over the last few years. While only about 257 companies (fourteen percent) were founded in 2010 or earlier, there were 836 (44 percent) from 2011 to 2015 alone. From 2016 to 2020, 790 companies (42 percent) of the dataset were established with a focus on drones.

At this point, it should be noted that older firms are more likely to be included in the data set than companies founded in the recent years. This is a natural limitation since newer companies are harder to find soon after they are established.

The software sector in particular is characterised by a large start-up culture. About 53 percent of drone companies were founded after 2015, compared to 42 percent in the service sector and only 36 percent in the hardware sector. In the software sector, a predominantly large number of drone companies from the UTM developer (57 percent) and Flight Planning, Fleet and Operation Management (54 percent) sub-segments were founded after 2015.

In the hardware segment, the establishment of new companies producing commercial drones actually declined in the period from 2016 to 2020 (234 companies) compared with the period from 2011 to 2015 (275 companies). Only passenger drone manufacturers show a higher distribution of companies (62 percent) being founded after 2015.

In the service sector, a continuous development similar to the overall market was generally seen. 43 percent of the service companies were founded after 2015 while 33 percent were founded in the period from 2011 to 2015. Most DSPs were established between 2011 to 2015 (54 percent), while about one-third (34 percent) were started between 2016 – 2020.

Larger drone companies were able to grow more strongly than small companies

It is noticeable that there is a correlation between time on the market, company size and company development. While drone companies from the hardware segment were founded on average as early as 2012, it was primarily the already-larger companies that developed positively last year.

In the software segment, a large number of smaller companies grew more than average, with their average year of foundation being 2015. Here again, the “maturity” of the different segments becomes clear. While drone hardware is already quite mature, the limiting factors for adapting drones today are often legislation and software.

In the software area, it is particularly important to develop industry-specific solutions to make the data recorded by the drone usable. There are many (smaller) software companies that have taken on this challenge, whereby success and failure are often close together. This may lead to rapid growth on the one side, but also to downsizing of the company on the other. The service sector, dominated by DSPs, moves between the two segments hardware and software.

“Remotisation” of work increased during the pandemic and drones are part of that

In general, it can be said that drone companies in 2020 have developed positively despite the pandemic. Whether the year would have been even better without Covid-19 and the average growth of the companies would have been higher than fifteen percent cannot be fully judged. But there were also other positive effects for the drone industry: First, there was an increased focus on certain drone applications, which created pressure to adapt them more quickly, and second, new applications, within the realms of “Remotisation” were created.


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