Busıness Journal Orlando
Orange Seminole Lake Osceola
shop talk | 12 HFF’s Michael Weinberg dishes on next-gen hotel concepts five minutes with ... | 3
April 19–25, 2013 orlandobusinessjournal.com
Visit Orlando CEO George Aguel
$3.00
These are the drones you’re looking for small biz snapshot
aussie pet mobile grooming biz is the cat’s meow 3
photO | jim carchidi
Unmanned aerial vehicles may be $13.6B industry — if FAA gets out of the way By Abraham Aboraya photO | jim carchidi
special report
mango’s tropical cafe joins i-drive lineup 10 photO | Mango’s Tropical Café
Hiring cool-down
Orlando tourism jobs gain expected to taper off 7
photO | jim carchidi
Central Florida is poised to have a niche industry take flight and pump millions of dollars into the local economy — if regulators don’t ground it. Nationwide, unmanned aerial vehicles — non-militarized drones — are projected to become a $13.6 billion industry in the U.S. by 2017, creating more than 70,000 jobs, according to the 2013 economic impact report of the Association of Unmanned Vehicle Systems International. Florida’s chunk of that would be $632 million, creating 3,200 jobs. But there’s a big caveat. The Federal Aviation Administration doesn’t allow commercialization of the systems, and regulations aren’t expected to come out until 2015 at the earliest. “If the FAA gives us something that is not too onerous, I think the numbers ➤ Local companies are larger than what’s on paper,” said leading the way 22 industry expert Patrick Egan, editor of ➤ What industry sUASNews.com. “If the regulations are needs to thrive 22 too strict, it will be hard to eke out a living or a ➤ Pending legislabusiness on it. That’s what’s at stake.” tion 22 Central Florida is in a good position to take advantage of the potential growth. See Pages 22➤ Economic impact 23 23 for an in-depth look at this issue.
[email protected] | (407) 241-2895 photo | JIM CARCHIDI
Al Ducharme of Hoverfly operates the camera on an Erista model drone flyer.
22 OBJ
orlandobusinessjournal.com
Flying under the radar
FAA regulations could make or break burgeoning industry By Abraham Aboraya Under a clear sky in Winter Springs, Al Ducharme, a founder at Hoverfly Technologies Inc., starts pressing buttons on a remote control hanging from his neck. In front of him, as two University of Central Florida interns step away, the Erista series heavy lifter drone comes to life. It beeps like R2D2, and red and green lights on the six rotors flip on. As the rotors whirl, there’s a breeze, and the unmanned aerial vehicle — a commercial drone — comes to life, floating in the empty field. Its payload is a gimbal holding a digital camera. It sounds 350 like a swarm of angry bees. Hoverfly Technologies Inc. is at the 300 forefront 250of a growing field. The company, which 200has 10 employees, is projecting $50 million 150 in revenue by 2015 — if it can break into 100 the law enforcement market. It would 50 create up to 50 new jobs if its business plan holds true. Currently, 0 the company is looking for 4,000 to 6,000 square feet of commercial office space, Economic with an interesting caveat: “There has to be a$500M field next to it,” Ducharme said. The challenge for those looking to get into the growing field of commercial un$400M manned aerial vehicles is the fact that it $300M is in a regulatory purgatory right now. Currently, hobbyists are allowed $200M
to use t he drones for recreation purposes, but if $1 changes h a nd , suddenly the transaction goes into a gray area. The Federal Av i a t i o n A d ministration is working on writing the rules to regulate the small unmanned systems industry. They’re expected to be out later in 2013 for review, and there are millions of dollars at stake. Nationwide, the commercial drone market — such as using drones to inspect bridges or high-rise buildings for needed repairs — could be valued at $11.6 billion in three years, and Florida’s piece of that would $162.3 million. That’s if — and it’s a big if — the FAA regulations don’t squash the industry. Hoverfly isn’t alone. Jeff Atkisson has formed Orlando-based Aeroxoom LLC, using a small unmanned aerial system to get video for clients. Atkisson doesn’t charge for using the drone; rather, clients pay for the editing of the video his drone shoots for free. “We all want to comply. Just tell us 350And the what we need to do to comply. answer now is ‘just wait.’ ” 300 250 There also are other drone firms 200 that operate in the shadows. Locals
Now hiring
$100M
100
Economic impact 50 0
0 Commercial drone-related employment in Florida could reach 2,471 direct jobs and 4,803 total jobs by 2025.
Direct
5,000
No. of jobs
150
Revenue from the commercial use of unmanned aerial vehicles in FlorEconomic ida would start at $54 million in 2015 and balloon to $239.7 million in 2025. The total economic impact in 2025 would be nearly $467 million.
$500M
4,000
$400M
3,000
$300M
2,000
$200M
1,000 0
said there’s at least one more company in Orlando and another in Tampa that operate out of sight of the FAA. “They’ve been flying in the shadows,” Ducharme said. W hy? Because t h ey ’r e wo r r i e d they’ll get a ceaseand-desist letter from the FAA. Currently, the administration frowns on the commercial use of drones, but there’s no developed rule yet. The FAA’s primary concern, according to a spokesman, is safety. The administration will fine someone flying an unmanned system if there’s a concern that they could cause harm or if they’re being reckless, but otherwise, the FAA tends to be reactive. “There is an underground and aboveground flying economy,” said industry expert Patrick Egan, editor of sUASNews. com. “There are thousands of people doing this commercially in the national airspace. The FAA sends them a ceaseand-desist letter, they change the name of the business and go on operating.” Ducharme and Hoverfly are trying to get out ahead of the regulations. They helped formed the Aerial Robotics Industry Association April 4, with the idea of promulgating an industry safety standard for pilots and camera operators using small drones. The idea is that the FAA would replicate those standards.
Total Employment Direct Employment
$100M 0
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Association for Unmanned Vehicle Systems International 2013 Economic Impact Report
Total economic impact Direct spending 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Association for Unmanned Vehicle Systems International 2013 Economic Impact Report
Direct
5,000 4,000
April 19–25, 2013
There are implications for other businesses, as well, that could use the drones in new ways. Take Marcio Teixeira, technology and sales director with Orlando-based Quattro Real Estate Solutions LLC. He’s used Aeroxoom to get aerial fly-by videos of Lucaya Orlando, a 76-unit vacation townhome project in Kissimmee. The community is building a 136-unit second phase. They’ve used video of sitework being done as a marketing tool. In one video, his company used the drones to do a fly-over of the construction site and then flew up to the model home. The video is a “compelling way to tell the story for future investors,” he said. “People are mind-blown with that,” Teixeira said. “How in the world could you do that with a helicopter?”
[email protected] | (407) 241-2895
Potential commercial applications of drones So what exactly would you be able to use a small unmanned aerial vehicle for? Here are some potential markets: • Law enforcement agencies can use the small drones to look for suspects on the run or to survey damage. • Civil engineers and public works groups could use the systems to inspect infrastructure. • Researchers and scientists can use the systems to collect data. • Precision agriculture: Use the drone to monitor crops for insects and water needs, allowing farmers to be more efficient. • Video: News agencies and filmmakers could use the systems to get overhead shots. “That’s the low-hanging fruit,” said Ben Gielow, government relations manager and general counsel for the Association for Unmanned Vehicle Systems International, an Arlington, Va.-based interest group. “We truly believe this will be such a big revolution that we haven’t thought of all the potential uses.” — Abraham Aboraya
April 19–25, 2013
orlandobusinessjournal.com
OBJ 23
Proposed state, federal drone laws What’s in a name? Quite a bit for By Abraham Aboraya U.S. Sen. Rand Paul isn’t the only one talking about drones. Paul, R-Kentucky, spent 13 hours on the Senate floor condemning the use of drone attacks on U.S. soil against U.S. citizens, grabbing headlines nationwide. And here is more legislation being considered related to the use of drones:
Florida legislation SB 92/HB 119: Freedom from Unwanted
Surveillance Act
Sponsors: Sen. Joe Negron, R-Palm City,
and Rep. Ritch Workman, R-Melbourne
What it does: Prevents a law enforcement
agency from using a drone to gather evidence, prohibiting use of the evidence in court if it violates the act and allowing civil action to prevent or remedy the action
Act of 2013
Sponsor: Rep. Ted Poe, Texas; What it does: Provides for a legal framework for the operation of public unmanned aircraft systems
Status: Referred to the House Committee on the Judiciary HR 1083: No Armed Drones Act of 2013 Sponsor: Rep. Michael C. Burgess, Texas; one co-sponsor
What it does: Amends the FAA Mod-
ernization & Reform Act of 2012 to establish prohibitions to prevent the use of an unmanned aircraft system as a weapon while operating in the national airspace system
Status: Referred to the House Committee
Federal legislation
HR 1242: To prohibit the use of drones
warranted Surveillance Act of 2013
Sponsor: Rep. Austin Scott, Texas What it does: Protects individual pri-
vacy against unwarranted governmental intrusion through the use of the unmanned aerial vehicles commonly called drones
Status: Referred to the House Commit-
tee on the Judiciary.
HR 637: Preserving American Privacy
photO | TH
11 co-sponsors
Status: Passed appropriations committee March 28, to be voted on April 17 HR 972: Preserving Freedom from Un-
growing commercial drone companies
on Transportation & Infrastructure to kill citizens of the United States within the United States.
Sponsor: Rep. Reid J. Ribble, Wis.; two co-sponsors
What it does: Prohibits the use of drones to kill U.S. citizens within the U.S.
Status: Referred to the Committee on
Intelligence (Permanent Select), in addition to the Committees on the Judiciary and Armed Services
SOURCE: Association for Unmanned Vehicle Systems International
INK STOCK
By Abraham Aboraya Close your eyes and think of the word drone: What do you see? If you’re like most people, you think of a small airplane, shaped like a beluga whale with a bump on the nose, packed with missiles, doing targeted assassinations in Pakistan. Or maybe you think of a small blip in the sky, something that covertly snaps your photo and logs your whereabouts. Al Ducharme, a founder of Winter Springs-based Hoverfly Technologies Inc., knows there’s an issue for companies looking to use small unmanned aerial systems commercially, like the ones Hoverfly sells. He’s been at public events, using one of his aerial robot systems to get video and people will wave to the floating robot’s camera. Afterward, people want to come up and chat about the system. If he calls it an unmanned aerial vehicle or an aerial robot, people think it’s a cool piece of technology. But call it a drone, and most take a step back from it or grab their child’s hand. “You see it on their faces,” Ducharme said. “The word ‘drone’ has an extremely negative connotation. Polarizing is exactly right.” It’s a problem the burgeoning commercial drone — er, correction, the commercial
small u n - manned aerial systems industry — will have to address if it’s going to grow, said industry expert Patrick tor at www.sUASEgan, an edinews.com. Although people now associate the technology with the military, said Egan, “not all drones are bad.” John Ludwig, CEO and founder of Orlando-based Push Inc., an Orlandobased advertising and branding firm, said the industry is facing a branding challenge. The word “drone” has been militarized and politicized, and the other terms — UAV, or unmanned aerial vehicles, or aerial robots — sound scientific. He likened it to ValuJet Airlines renaming itself as AirTran Airways after ValuJet became synonymous with the fiery 1996 Florida airplane crash into the Everglades that killed 110 passengers. “The onus is a new moniker or name to differentiate themselves from the military,” Ludwig said. “They’re going to have to invest in branding, to invest in PR, to separate themselves from that connotation of drones.”
[email protected] | (407) 241-2895
