Number of UAV start-ups on rise in developing countries

Around the dawn of the 21st century, the world is gradually getting used to a new set of tech terminologies, starting from unmanned aerial vehicles (UAVs or drones), big data, Artificial Intelligence (AI) to start-ups. We are also at the cusp of the fourth industrial revolution (4IR), which is likely to have a transformational impact in every sphere of our life. Although start-ups, AI, or UAVs have root in advanced countries, they are showing potentials in developing countries as well. Due to the commoditisation of hardware component technologies, software-centric innovations around them are also opening up new opportunities for promising start-ups in these countries.

It's well-accepted that knowledge economies in advanced countries are driven by start-ups. For start-ups to grow into profitable businesses, wealth creation opportunities out of ideas around emerging technologies, particularly in the local economy, are vital. Despite aspiration, often developing countries face multiple challenges to exploit this opportunity in driving economic growth. Some of the challenges are the absence of strong local wealth creation opportunities-preferable offering springboard to expand in the global market--and access to technology as well as demand. Fortunately, UAV-based ideas of wealth creation have a strong correlation to virtually every local economy, particularly in developing countries like Bangladesh. And there is a commonality of UAV-based remote sensing innovations between local and global demands. Moreover, images and data captured by UAVs from across the world could be sent anywhere for analysing and producing higher-level information products-consequentially reducing the market access barrier.

Although UAV hardware start-ups used to dominate the venture capital financing in the recent past, the focus has been shifting to service innovation start-ups. Across the world, starting from Africa to South America, there has been a sudden rise of start-ups and venture capital financing to exploit the potential of using UAVs as high-performing remote sensing and autonomous delivery platforms.

In Africa, it appears that a UAV revolution is sweeping through sub-Saharan Africa. Countries across the continent are not only experimenting with this 21st-century technology but also actively participating in UAV service innovation start-ups. To leapfrog in leveraging 4IR innovation, governments of countries like Rwanda, and Malawi became one of the 4IRst adopters of progressive UAV programmes. Over the last couple of years Kenya, Ghana, and Tanzania have issued or updated drone regulatory guidelines and announced future UAV initiatives. Among the start-ups, Zipline is the most robust and visible drone using start-up in Sub-Saharan Africa. This company, backed by a $41 million VC fund, primarily focuses on the delivery of critical medical supplies. This was one of 10 selected to participate in a drone pilot in the US- to operate beyond visual line of sight medical delivery services. In the non-delivery commercial market, South Africa's Rocket mine has built out a UAV survey business in five countries. The company looks to book US$2 million in revenue in 2018 for its "aerial data solutions" services in mining, agriculture, forestry, and civil engineering.

More African use cases are likely to come from the Lake Victoria Challenge - a mission specific drone operator challenge set in Tanzania's Mwanza testing corridor, and We Robotics' Flying Labs opened in Kenya, Tanzania, and Benin. Rwanda's performance-based drone regulations, in particular, advancing beyond visual line of sight UAV technology at a quicker pace appears to be quiet notable to leveraging UAV potentials. As reported by Reuters, "With drones, Africa is willing to take more bold steps more quickly because the benefits are there and the countries have been willing to move in a more agile manner around regulation". Upon being left behind from the space during the third industrial revolution, Africa is taking bold steps in leveraging the space with UAV.

According to Geospatial World, there are 30 UAV start-ups in India, worth keeping an eye on. From agriculture to smart cities to construction to surveying, these start-ups are pursuing innovations around drone technology for enhancing efficiency and productivity. It's being reported that the ecosystem of drone start-ups in India is just taking off and private players would enrich it with a much-needed competitive edge providing both value and dynamism. Some of the start-ups are planning to offer services to enterprise clients with a focus on services like geographic information system (GIS) surveying and mapping, industrial inspection and precision agriculture. Others are looking into aerial images delivering high accurate Topography data, 3D Digital Elevation Models and Digital Surface Models to enable better assessment, planning, surveying, inspection, and maintenance. As reported by Business Standard in an article titled "Indian drone start-ups buckle up for increased competition, investments" last year, drone start-ups in India are already in the radars of international VC funds like Qualcomm Ventures, the $1 billion venture capital arm of global tech giant Qualcomm. This fund, with the interest of investing in emerging technologies such as AI, IoT, and robotics, is now looking to bet big on Indian start-ups developing AI-led applications, like UAV data analytics. While picking equity stake in Chennai-based speech recognition start-ups, former Cisco chairman John Chambers expressed his interest to invest in start-ups working in the field of artificial intelligence, natural language processing, Internet of Things, robotics, machine learning, drones or security segments.

South America is also showing a growing response to UAV start-ups. For example, a Brazilian drone start-up recently raised US$2 million from Equity crowd funding platform. In Malaysia, AXIATA Digital Innovation Fund (ADIF), Malaysia's largest digital corporate venture capital fund established by Axiata Group Bhd (Axiata), has made its largest investment in a specialist drone solutions provider. Due to high potentials, specific VC funds are being raised for investment in drone start-ups. For example, Japan-based US$ 27 million-worth Drone Fund is focusing to invest into drone start-ups in Japan and the rest of Asia. According to CBINSIGHTS, global venture capital investment to drone companies continues to break records and is projected to reach new highs. The global UAV start-up space in 2016 saw a record of 100 deals worth approximately $454M in funding.

According to an international consultancy, drone data for business intelligence is a $127 billion opportunity. The recent surge in drone start-ups has been in service innovation so that this potential can be turned into wealth. This is a significant opportunity for developing countries to enhance the efficiency and effectiveness of their major economic sectors by leveraging UAV-based remote sensing service innovations. Moreover, local service innovation offers the opportunity to attain productive knowledge base and demonstrate competence in exploiting the global service market. Instead of focusing on regulations in restricting UAV usages, it's time for the governments of developing countries to take a proactive role in catalysing the growth of UAV start-ups for service innovation, through liberal regulations, research and development (R&D) supports and lead usages.

M Rokonuzzaman Ph.D is academic and researcher on technology,

innovation and policy.

[email protected]