How Fast is the Drone Market Really Growing?
Everyone knows that unmanned aerial vehicles (UAVs) of every kind are proliferating rapidly, and sales are booming, but how fast is the global drone market actually growing? No two market research firms seem to agree on the precise numbers, in fact.
The German company Drone Industry Insights (DII) estimated the size of the UAV market (in US dollars) at $26.3 billion in 2021. But with ever-burgeoning sales, DII forecasts that the drone market will grow to $41.4 billion by 2026. Overall, that’s 57.4% increase or a Compound Annual Growth Rate (CAGR) of 9.4%.
Others see stronger growth. For example, Market and Markets (M&M) largely agrees on the 2021 figure – $27.4 billion – but estimates the volume of the market in 2026 at $58.4 billion, which means the market will more than double in size. M&M also places the CAGR much higher – at 16.4%.
Another area of disagreement is whether the military or civilian drone sector is growing faster. Drones, it is well known, grew out of the defense sector, but are military applications still predominant? Yes, say some analysts, in part, because special purpose military drones are proliferating, and more countries are manufacturing armed drones, including for export. However, many analysts suggest that the commercial sector is growing far more rapidly overall. For example, M&M pegs the CAGR for the military segment at just 9.0% compared to a whopping 28% for the commercial segment.
One somewhat surprising area of disagreement concerns the growth of the drone market in agriculture. Some analysts like Knowledge Sourcing see AG as a huge growth sector, estimating a whooping 32.5% CAGR through 2026. But Global Information pours heavy water on that optimistic forecast, suggesting that COVID-19, fragmentation in land holdings in countries like India and slumping crop prices globally will limit the CAGR in agriculture to a paltry 7.1%.
By contrast, analysts seem to agree that transportation and logistics, though not the largest component currently, will likely become so over the next 8-10 years. Reportlinker.com, in a market study released just this month, predicted that persistent global supply chain issues, coupled with the development of new cargo and package delivery technology, would place “autonomous maritime operations” – especially shore-to-ship and ship-to-ship – in the forefront of future drone activities worldwide.
In the short term, media and entertainment is likely to remain the leading growth segment in the commercial drone sector, several analysts say. That finding may seem surprising to those that detect major growth occurring in construction and mining, for example. However, according to Grand View Research, “The increasing demand from clients and owners for advertising resorts, hotels, tourist spots, public places, and amusement parks through aerial photography is anticipated to boost [this] segment’s growth.”
Which country claims the largest share of the UAV market? It’s still the United States, by far. All analysts agree on this point. However, what’s the fastest growing market? Most would say the Asia-Pacific, especially China, followed by India. M&M projects the CAGR in the Asia-Pacific at 18.5% for the 2021-2026 period. However, analysts like the Colorado-based Tractica argue that Europe – with its aggressive and unified drone promoting policies throughout the EU – is being vastly underestimated and undervalued. Tractica estimates a 20% CAGR in Europe over the same period and suggests that the region is “an even more attractive market than the US or Asian markets in terms of return on investment (ROI).”
Whatever their disagreements over market size and CAGR, no drone market analyst sees the market slowing down anytime soon. In fact, when analysts forecast further ahead, they see the CAGR growing even higher. For example, Fact.MR, which estimated the global drone market at $30 billion in 2022, consistent with other industry estimates, sees the market rising exponentially to $279 billion by 2032 – for a CAGR of 25% over the next ten years
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