America may not have Star Wars’ C-3PO and R2-D2 when it comes to humanoid helpers, but 21st century automation is getting close.
As technology makes unmanned aerial drones (also known as unmanned aerial systems) more available, industry leaders are recognizing the benefits of replacing a human with a drone for risky or expensive tasks.
For example, the National Hurricane Center plans to fly expendable $70,000 aerial drones produced by former BAE Systems (LSE: BA.L) subsidiary Sensintel Inc. into the eyes of storms this hurricane season. Mining juggernaut Rio Tinto PLC (NYSE: RIO) plans on deploying them to map future mine sites, monitor stockpiles, and conduct other tasks.
According to a report by the Association for Unmanned Vehicle Systems International (AUVSI), between 2015 and 2025 drone technology is predicted to generate $82.1 billion. And the industry is expected to create 100,000 high-tech, high-paying jobs.
So, how can you get your portfolio to soar alongside drone development? It turns out there are quite a few options, depending on which drone-prone market you choose to invest in.
A New Spin on Agricultural Applications
According to the AUVSI report, most of drones’ economic impact will be in the field of agriculture, which will account for $75.6 billion – while all other applications will amount to just $6.4 billion.
And where will these extremely sophisticated applications be put to use? In the skies above traditional farming states like Iowa. The adoption of drones could mean the addition of 1,200 jobs and a $950 million economic impact to the state’s economy. Instead of walking the field or hopping aboard a crop duster, farmers will soon be able to check on their crops via remote-controlled drones equipped with infrared sensors, cameras and sophisticated sensor suites.
Japan has already gotten in on the UAV action. At least 2,500 RMax unmanned aerial helicopters produced by Yamaha Corporation (OTC: YAMCY) are already casting seeds, performing crop fumigation, and executing frost mitigation.
It’s an attractive business opportunity for military drone producers, who are looking for new applications as the flush business opportunities from two wars taper off.
Execs with military drone mega-producer Northrop Grumman (NYSE: NOC) have already expressed interest in adapting two of its most popular models – the Bat and R Bat – to crop-dusting duty. Northrop Grumman stock has been performing well, especially after the U.S. Navy named it a top-performing weapon supplier on June 10. That day, stock prices peaked at $119.17.
And why shouldn’t drones from companies like Northrop be adapted? Drones already spray 40% of Japan’s rice crops.
Actually, there’s a very good reason.