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North Carolina: First in Flight Once Again?
UAVs (unmanned aerial vehicles), like this one flown by the NextGen Air Transportation (NGAT) Center in North Carolina, could be more widely used by many industries, such as for crop surveillance and power line inspection, if the FAA clears the use of small UAV integration for commercial operations
Photo courtesy of the NGAT Program at NC State University
North Carolina could well be on its way to becoming a "Silicon Valley" for the unmanned aircraft systems (UAS) industry, providing a home base for smart, interconnected technology development in the skies and on the ground for major companies, start-ups, and the contract manufacturers who support them.
Experts say that UAS development could soon revolutionize the aircraft industry nationwide, bring tens of thousands of jobs to whatever state embraces the technology, and possibly create a reshoring effect with overseas vendors relocating to follow big UAS businesses looking to set up shop in America. The term "UAS" encompasses not only unmanned aerial vehicles (UAVs), but also the aircraft's related hardware, software, and data. Unlike military drones, the UAVs catching economic and regulatory air in North Carolina are intended for commercial use.
One such UAV company, Olaeris, recently named North Carolina as its top choice—over 19 other states—to relocate to from its Bangkok headquarters and manufacture UAV systems for civilian applications. Olaeris (www.olaeris.com) is the developer and manufacturer of AEVATM (Aerial Electric Visual Assistant), a saucer-shaped, unmanned aircraft that is mostly used for 911 emergency response for cities. The company's primary electronics component supplier, which is currently based overseas, said it plans on setting up shop next to Olaeris wherever it decides to go.
North Carolina, and specifically the Piedmont area, was tapped by Olaeris as its first choice for relocating its manufacturing because it has the universities, military bases, mountains, and coastal seaways ideal not only for flying aircraft, but also for researching and developing the technology.
"For any UAV company that wants to be in a (U.S.) state, we want to be able to fly our aircraft. North Carolina is better positioned than any other state in the country," said Olaeris CEO Ted Lindsley during a phone interview.
And not only does North Carolina have the perfect terrain of mountains, beaches, and rural and urban settings, it has the talent base for UAS development. In-state universities supply engineers and analysts, UAV trained pilots come from military bases in Fort Brag and Cherry Point, and contract manufacturers are already in the state supplying software, aircraft components, sensors, and electronics.
"We have an awesome infrastructure already," said Kyle Snyder, director of the NextGen Air Transportation (NGAT) Center at the Institute for Transportation Research and Education (ITRE) at North Carolina State University in Raleigh, N.C. "What NGAT has been working on as part of that infrastructure is building a 'UAV ecosystem.'"
In Lindsley's eyes, the NGAT is an asset that weighs heavily in North Carolina's favor as the preferred location for Olaeris' headquarters. Snyder is a similar asset for Olaeris, Lindsley said, calling him "the most knowledgeable state UAS director that we've met."
Snyder's passion and expertise is centered on UAV technology. Having worked in the past for UAV companies, research universities, and two years with the Association for Unmanned Vehicle Systems International (AUVSI), he was courted by the North Carolina Department of Transportation in 2012 to re-launch the NextGen program in the state and to help mold North Carolina into the most-advanced UAS hub in the country.
Although there are complicated regulatory and legislative hurdles to maneuver through, there is strong political support in North Carolina to support UAS development and start attracting forward-thinking companies like Olaeris into the state. After Lindsley publicly expressed interest earlier this year in relocating Olaeris from Bangkok to North Carolina, Snyder called Lindsley personally to explain that he has a map laid out to develop UAS interest in the state and to tell him he is working closely with legislators to create a UAV ecosystem, where not only is North Carolina the physically most qualified state for UAV flight, but also working to become the most welcoming and accommodating state in the country to test and develop the entire UAS technology.
"I said, 'I'm telling you right now, North Carolina is where you want to be,'" Snyder said, recalling his first conversation with Lindsley.
All of the state leadership—the Dept. of Transportation's division of aviation, the governor's office, the Dept. of Commerce, the Dept. of Environment & Natural Resources, and the Dept. of Public Safety—has gotten together to promote UAV-friendly legislation in the state and to work with the FAA to create regulations that promote widespread state UAV use.
"We want North Carolina to be at the lead, at the forefront of all this development, especially as UAVs are starting to move into the commercial world," Snyder said.
Last year, for the first time, universities topped the Dept. of Defense in their number of FAA-delivered COAs (certificates of authorization) to fly UAVs in newly opened up territories for UAV flight. North Carolina has 12 approved COAs from the FAA and expects four or five more by the end of the year.
Regions covered by the COAs currently include farmland, public airports, and roadways. "What's driving this is the universities are beginning research partnerships with industries (for UAV safe airspace and application development). We've (N.C.) got new technologies, we've got new ideas, and we need to go out and do this the right way. So we're seeing the growth between the universities and industries that was anticipated and that's what's been driving these numbers into $11 billion a year markets and how we expect a quarter of a million jobs to be created in the next five years," Snyder explained.
Certainly legislators are motivated by the projection of new employment in the state due to UAS development, but the economic prospects are alluring as well. Precision Hawk (an Indianapolis startup that specializes in small unmanned aircraft) recently decided to base its operations in Raleigh, N.C., and Digital Harvest (a Virginia company that uses unmanned flight to advance agricultural technologies) is looking to relocate to the North Carolina next year, Snyder said.
This animated simulation of AEVATM (Aerial Electric Visual Assistant) shows how the saucer-shaped, unmanned aircraft by Olaeris could be used for 911 emergency and disaster management response in cities
Photo courtesy Olaeris
"This would definitely be a huge deal for the state, and we're counting on that to land these jobs, and get these companies here, and take advantage of the technologies and capabilities that the (UAV) systems improve," Snyder explained.
But there needs to be a "full and holistic" approach to developing the UAS industry in the state, so that there is licensing involved in flight requests, data on flights is collected and shared appropriately, and public safety and rights are taken into account, he said.
"We're not just saying come here and fly because we have great places to fly, or come here and train because we've got great schools. Everyone knows all that. I'm saying 'let's put the full infrastructure in place,'" Snyder continued.
Growing Upward and Outward
And as more of the skies open up in North Carolina for UAV flight and more big UAS manufacturers look into the state, contract manufacturers will grow within the state alongside the big companies, and some are choosing to relocate to North Carolina to be a part of the UAV action. Growing existing contract manufacturers or bringing in new ones is key to becoming a "self-sustaining" state for UAS development, Snyder said.
"That's part of the infrastructure we're trying to put in place here. Don't just come here to build UAVs (and use overseas vendors). But use either the existing talent we've got here or know that we're open to bringing in the rest of that business capability so we can do as much here as we can and know we'll be able to grow both nationally and globally," Snyder explained.
Olaeris (www.olaeris.com), which has had purchase interest from 31 different countries, has been stalling business prospects because Lindsley said he really wants to move his headquarters to North Carolina. But he is waiting to see what the state's political maneuvering will mean for UAV development before he makes a decision. State legislators appear to be embracing the technology and are currently taking legislative steps to pave the way for more expanded UAV use. And state representatives are also working with the FAA to open up the skies to more UAV systems.
The FAA was ordered by Congress to set national rules for small UAV integration for commercial operations by September 2015, but the agency recently announced it will not meet that deadline. Currently, the FAA allows operators of small UAVs to fly their craft below 400 feet only for non-commercial uses, a ruling set forth in 1981 before UAV operators saw the potential for aerial photography of crops and other commercial uses, like Olaeris's 911 emergency response UAV.
"So the future fog is still pretty thick," said Snyder in an e-mailed response. Snyder earlier recalled being at a UAV trade show in 2001 and everyone was saying how small UAV integration for commercial purposes would be approved by the FAA in ten years, and he echoed frustrations at the FAA's slow action since then.
"But we're getting there," he said, noting the FAA's increased issuing of COAs (certificates of authorization) to fly in certain areas for universities involved in UAV technologies.
"The more we fly today and grab the flight data to support the maturity claims of the technology vendors and develop the procedures for supporting safe integration- the better we all are. That's again why university partnerships are key today."
The FAA is in a "tough place," Snyder acknowledged, because the United States has the most complex, busiest airspace in the world. And possibly because of this, instead of making sweeping changes on commercial UAS integration, the FAA appears to be advancing the technology much more slowly through a case-by-case, individual approval system like the recent Alaska decision, Snyder said.
Last June, the FAA gave approval for energy corporation BP and UAS manufacturer AeroVironment to fly a small "Puma" UAV for aerial surveys in Alaska —the first time the FAA has authorized a commercial UAS operation over land.
"These surveys on Alaska's North Slope are another important step toward broader commercial use of unmanned aircraft," said Transportation Secretary Anthony Foxx, in a June press release. "The technology is quickly changing, and the opportunities are growing."
The AUVSI and 32 other organizations presented a formal letter to the FAA last June, urging the agency to expedite the rulemaking process for UAS operation in U.S. airspace, specifically calling on the FAA to allow the limited use of small UAS for commercial purposes earlier than its final September 2015 ruling, which has now been delayed.
"This (FAA decision) is important because the UAV industry represents an enormous manufacturing opportunity for the U.S.," Lindsley explained, adding that it could mean $300 billion per year in sales and represents tens of thousands of jobs.
The AUVSI estimates that the integration of UAS into the national airspace for commercial applications will create an estimated 100,000 new jobs and $82 billion in economic impact in the first decade following national integration, as well as nearly 1,200 UAS jobs in North Carolina and $600 million in economic activity in the state by 2025. North Carolina legislators have said they are poised to support an emerging private industry that would bring new jobs and related economic development, but UAS businesses both in-state and prospective out-of-staters, are holding their breath as the state goes through legal and regulatory machinations.
Since announcing earlier this year his intention of relocating to North Carolina, Lindsley said he has received hundreds of e-mails from U.S.-based contract manufacturers, such as fabrication shops, offering their services to help manufacture the company's UAV systems, which are graduating from emergency response systems and into other markets, such as agriculture, power line inspection, and oil and gas.
AEVATM (Aerial Electric Visual Assistant) by Olaeris, is a fully-autonomous UAV system designed for 911 emergency and disaster management response in cities. The flying-saucer shaped aircraft, can automatically launch, navigate, and arrive to 911 emergency incidents in about 90 seconds. This gives police, fire, and rescue teams early visuals of emergency situations so they can adjust their response.
Photo courtesy Olaeris
As a small company that wants to grow internally and ramp up quickly, Lindsley said he is interested in working with U.S. contract manufacturers if he does indeed decide to relocate to North Carolina.
"It's so much easier to rely on (job) shops to do fabrication, such as contract vendors that can do the electric boards for us, or the fiberglass, or composites molding," he said.
But Lindsley said he wants a quick answer as to whether North Carolina will give him the regulatory freedom to develop his products.
"North Carolina doesn't have six months to figure this out," he said. "We've been in talks for over a year and they already missed our May 5th deadline," he said in an e-mailed response. "After September 25th, we have made it clear we will focus on Australia, China, India, or Canada, where we can already accomplish our goals."
Lindsley would prefer to be a U.S.-based company with U.S. vendors and better customer support since his company—Olaeris—is currently manufacturing and marketing its flagship product, AEVATM, a fully-autonomous UAV system designed for 911 emergency and disaster management response. For police and fire departments, each AEVATM is as effective as hiring six to eight more personnel and at a 75 percent lower cost to the city, he said. AEVATM, a flying-saucer shaped aircraft, can automatically launch, navigate, and arrive to 911 emergency incidents in about 90 seconds. This gives police, fire, and rescue teams early visuals of emergency situations so that they can adjust their response based on what is happening.
But emergency response is just the tip of the iceberg for Olaeris, with Lindsley adding that the company is already developing a second, bigger UAV aircraft that is designed for commercial applications and would be used as a replacement to manned helicopters. Power line inspection is a market Olaeris is looking to get into, since power lines are usually inspected once a year by manned helicopters costing about $1,000 to $2,000 per hour. And oil and gas pipelines are required to be inspected every two weeks by a manned aircraft costing about $500 to $2,000 per hour.
"We can do that for ten cents on the dollar," Lindsley said.
If North Carolina comes through, it will be the equivalent of being a Silicon Valley because if they can become the first state to begin routinely using the technology, major players in the UAV industry will pile in, he explained.
"You'll see 40 or 50 companies pop up in the first few years alone," Lindsley said. "Some small, some large, and even some large prime military contractors will follow in about a year or two because they need a place (N.C.) where they can do R&D and testing and ramp up production."
UAV production will turn the traditional aircraft market upside down and affect other industries as well, Lindsley said.
"Everything that's happening in the UAV industry will impact virtually every industry on the planet," he said.
Robotics companies, which are being bought up by Google, are developing driverless cars, buses, trains, and public transportation systems, and these automation systems (even those used by the military) were born from sensors that came out of the UAV industry, Lindsley said. Even commercial aircraft, although 10-15 years away, could be replaced by UAV technology.
This driverless car technology and other autonomous "robotic" systems are going to be a $300 billion market and the UAV industry will be a piece of that because it's going to get "smarter," Snyder said. "UAVs are going to make aviation a part of our everyday lives," he added, explaining that UAVs could be used by consumers to fly around their backyard to get a visual and plan a garden or to change a light bulb in a foyer.
With the FAA on board, these UAV systems could mean the birthplace of a transportation technology revolution where the Internet of Things enables connected airplanes, cars, and other transportation to "talk" to each other, NGAT's Snyder said. It might be five to 10 years away, Snyder said, but companies like Olaeris and forward-thinkers like Lindsley are taking the leap and North Carolina should quickly ramp-up its efforts to accommodate UAS advancement.
"He (Lindsley) has taken that leap forward. And what we've said is that North Carolina wants to be 2025 ready in 2020. We want to invest in that long-term future. Other states are going to look back here (N.C.) in ten years and wonder how the heck we got here. And it's going to be because North Carolina was willing to lean far enough forward and do its homework and go through the pain. Nobody said it was going to be easy," Snyder said.
Whether this vision will become a reality for North Carolina is now up to the state's Department of Commerce, which is debating whether to commit one to two million dollars per year to set the plan in motion, while thousands of new jobs, billions in revenues, and a chance to become the new Silicon Valley hang in the balance, Lindsley said.
"Meanwhile, states like California and Ohio have been paying attention and are catching up faster than North Carolina is progressing, he continued. If North Carolina DOC can't make a firm commitment to Olaeris and NGAT by September 25th 2014, after more than a year of planning and explaining the urgency to proceed, the greatest economic development opportunity in 50 years will go offshore or to another state with no hope of rekindling it. To me, that would be inexcusable," said Lindsley.
A spokesperson for the North Carolina Department of Commerce would not get specific when asked to respond to Lindsley's comments and reported deadline for the state.
"We are always looking for opportunities to recruit companies to North Carolina," said North Carolina Commerce spokesperson Kim Genardo. "However, the North Carolina Department of Commerce does not discuss whether it is or isn't working with any company in any capacity. We are happy to provide information if and when a project is publicly announced."
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