In the News
Drones – taking the UK’s economy to new heights or a cause of market failure?
A new report from PriceWaterhouseCoopers estimates that an army of approaching 100,000 drones (or unmanned aerial vehicles) appearing in the UK over the next decade could have a significant impact on the supply-side of the UK economy.
They claim that the widespread adoption of drones in industries ranging from construction or defence to energy or logistics, will employ hundreds of thousands of people and lift UK GDP by almost 2% between now and 2030. You can read the full report here.
According to the PWC report:
"Cost reductions from drone usage will feed into an increase of 3.2% in “multi-factor” productivity across the UK economy, and contribute to large GDP uplifts in many industries: £8.6bn in construction and manufacturing; £7.7bn in wholesale, retail trade and food services; and £11.4bn in the public sector (including defence, health & education)."
Drones have the clear potential to be a form of disruptive technology that will create and eliminate jobs. PWC are optimistic about their net impact forecasting that by 2030 they will lead to a £42bn increase in UK gross domestic product (GDP) from 76,000 drones operating in the UK’s skies and with 628,000 jobs in the drones economy.
For other economists, there is a market failure aspect to consider. Drones can create both positive and negative externalities in consumption including:
- Fears over their ability to collect personal data / fears over loss of privacy
- Concerns over drones flying (unregulated) in congested urban areas near people, buildings and aircraft
Positive externalities include increased worker safety for example in the telecoms, oil and gas industries and in delivering essential drugs to communities in remote areas.