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PwC Up front | Issue 5 | Harnessing technology

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The sky's the limit Drone technology wings its way into civilian life Last December, online retail giant Amazon.com, Inc. revealed that it was developing a new method of getting packages to customers within 30 minutes of purchase. There's only one way to ship items from warehouse to home that quickly: with drones that fly to your front door and drop off your items. Such lightning-fast delivery would transform the shipping and logistics industries, but Amazon isn't the only company with big plans for drones, which are also known as unmanned aerial vehicles (UAVs). Facebook Inc. wants to use them to beam Internet connectivity to the masses, and Google Inc. recently bought Titan Aerospace so it can dispatch the New Mexico-based company's UAVs to map disaster areas and take high-quality images of the Earth. Some observers think people will eventually pick up their groceries with personal drones. UAVs have become a military fixture (the U.S. government devotes a reported $2-billion (U.S.) a year to drone R&D) but the business world isn't far behind. Over the next decade, 12 per cent of the $98-billion (U.S.) in total global spending on drones will be commercial, projects BI Intelligence, a division of New York-based business and technology news publisher Business Insider, Inc. Drone rangers Canada may be the North American testing ground for drones because our laws governing the aircraft are more lenient than those in the U.S., which doesn't allow commercial UAVs in the skies. Here, flying a drone requires a certificate handed out by Transport Canada on a case-by-case basis. Dave Kroetsch, Co-Founder and President of Waterloo, Ont.-based Aeryon Labs Inc., is already cashing in on Canada's more relaxed regulatory environment. Aeryon has shipped hundreds of UAVs since 2009, when it sold its first. The company has customers in Canada, Europe, the Middle East, South America and the U.S., where it serves government clients. Buyers tend to use Aeryon vehicles for specific tasks rather than for recreational use, as some UAV owners do. In agriculture, farming operations big and small are hiring companies to send up Kroetsch's camera- equipped UAVs to check the health of their crops. Utilities fly them to inspect insulators around power lines, oil-and-gas companies launch them to view hard-to-access pipelines and universities have purchased them for marine mammal research. Meanwhile, law-enforcement agencies are buying Aeryon drones to keep an eye on big crowds and quickly respond to crashes on major highways. About 80 per cent of customers use the machines to stream photos and videos in real time, Kroetsch notes. We're going to see a new type of transportation network in the world. It's a big deal. " " Taking flight Regions with poor transportation infrastructure are looking closely at drones, says Andreas Raptopoulos, Co-Founder and CEO of Palo Alto, Calif.-based Matternet Inc., which develops UAV technology and licenses it to other companies. Raptopoulos can see doctors in Africa transporting medicine to people with no access to roads, non-profits flying emergency goods to victims of natural disasters and governments sending documents to remote locations. "We're going to see a new type of transportation network in the world," he says. "It's a big deal." Aeryon's Kroetsch is focusing on growing his share of the so-called dull, dirty and dangerous sectors – energy, law enforcement and agriculture, for example – but he's confident that drones will become a fixture in the sky. The UAV revolution offers plenty of opportunities for smaller businesses. The main reason that many companies would want to use a drone is to capture aerial imagery or economically collect data that a satellite would otherwise gather, Kroetsch says. But when it comes to possible uses, the sky is literally the limit. For instance, architects might fly UAVs to survey building sites, and construction companies could deploy them to install parts on a skyscraper. It will take a while for regulations to catch up and for people to get comfortable with drones, but these aircraft will become mainstream, Raptopoulos predicts. We may even have our own UAVs. "Imagine waking up one morning and having no milk. Just send your vehicle to the closest supermarket, buy a litre and fly it back," Raptopoulos says. "It may sound a little ridiculous, but it can happen." Uf Special feature | Game-changing technologies Drones 30 Up front Summer 2014

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