A Short Treatise on Commercial Drone Economics and Why It Is Needed

In the past 10 years, drones have garnered much attention and much reporting ink. And rightly so. Hundreds of millions of dollars are invested in commercial drones and Urban Air Mobility (UAM) every year, making this emerging industry a hot topic of discussion. The popularity is also evidenced by the proliferation of drone conferences in recent years. The overarching—and as yet unaddressed—question is this: When and how will commercial drone-based companies begin to make money?

The intention of this book is to discuss commercial drone economics. DRONE is an acronym for Dynamic Remotely Operated Navigation Equipment. The purpose of a commercial drone is to provide a reliable income stream to the user…to make money.

This short introduction will give the interested reader a notion of where profits may lie, the expected difficulties in earning them, and why commercial drones are projected to be a disruptive technology. Despite no existing consensus on long-term pricing strategies, particularly for essential products such as Unmanned Traffic Management (UTM), entrepreneurs are drawn to this business and investors are willing to fund it. The question is why. The obvious answer is that many believe that commercial drones will eventually make money. At the same time, many more will lose money. When and under what conditions this will happen is the subject of Drone Economics: Succeeding With the World’s Newest Form of Transportation. One size will not fit all. However, the industry, even at this nascent stage, needs to pay concerted attention to business models and the future.

In this chapter we will talk about

•How to create value with drones using some basic economic principles.

•The Fundamental Axiom of Drone Economics

•What is a Disruptive technology and how Drones are disruptive technology?

•Case Study: the growth of an invasive aquatic plant in Fish Lake Utah

•Conclusions from the case showing issues and promise.

•Fundamental Thoughts on creating value

To read this chapter and others please order your copy of Drone Economics book from Amazon. Kindle version is also available.

Darryl Jenkins talks about this chapter in the following video