Nevada’s Mission To Build The Detroit Of Drones


Satta Sarmah

November 4, 2014

When you think of Nevada, you think of a lot of things–casinos, hookers, quickie marriages and divorces–that are really about Las Vegas. To the north of Sin City you have a region that, like many places in the country, is yearning to jumpstart a new industry that could drive good-paying middle class jobs. Increasingly, Nevadans think they’ve found that opportunity zooming unmanned over their heads.

In December, the FAA designated Nevada as one of six test sites for unmanned aircraft systems, paving the way for the state to become the epicenter of the country’s drone industry–at least that’s the hope espoused by Nevada’s governor Brian Sandoval. The Republican governor celebrated the news by pointing to forecasts predicting thousands of job “with an average wage of $62,000,” and Democratic politicians have cheered along. So have non-profit organizations, local universities and drone companies that have recently flocked to the state.

“We want to develop a new reputation for Nevada of being the Silicon Valley for autonomous systems,” said Warren Rapp, business director for the Advanced Autonomous Systems Innovation Center. The goal is to suck up the biggest share of the global drone market that will swell to an estimated $90 billion in the next decade. Steve Hill, executive director of the Governor’s Office of Economic Development in Nevada says drones could eventually bring in $2.5 billion to $8 billion annually.

The primary competition for Reno and the rest of northern Nevada is San Diego, a city with a strong defense manufacturing sector whose drone industry had ballooned to as much as an estimated $2 billion in 2013. San Diego’s drone industry benefits mightily from several big military facilities and leading drone makers like Northrup Grumman.

But as the FAA works toward a 2015 deadline to create regulations for commercial drone use (a deadline it will likely miss), Nevada is making its case–starting with the fact there’s not much to crash into in the desert. Nevada’s wide open terrain and the fact that nearly 90% of its land is federally managed all help minimize high cost collisions. It’s one of the largest states, but with a much lower population density than California or Florida (a state also vying to be the country’s drone capital.) The open spaces help reduce some of the public safety and privacy concerns usually raised with drones.

While some Nevadans argue the state needs to seriously discuss regulations in a state famous for its crashing UFOs, supporters cast drones as a natural next step in the state’s history of aerospace experimentation.

It’s not just atom bombs in the Nevada desert: In recent decades, the state has been the testing site for unmanned aerial vehicles (UAVs), particularly for military applications for the Air Force, Navy and the Department of Energy. In pre-9/11 2001, the U.S. government used Nevada as a testing ground for armed drones, launching the MQ1 Predator drone to fire a missile on a replica of Osama Bin Laden’s Afghanistan residence.

“With that 30-year pedigree of understanding the systems, we utilized that information and that was a really compelling reason why we got the FAA designation,” said Thomas Wilczek, an aerospace & defense industry specialist who is working with the governor’s office.

Nevada’s efforts to reel in drone dollars have received bipartisan support, with the state legislature approving $4 million for a drone testing program. The initiative, along with the state’s favorable business climate (it has no corporate income tax), is producing results: Drone manufacturer Ashima announced it will move its headquarters from California to Reno, creating 400 jobs by 2018. Flirtey, an Australian start-up focused on UAV delivery, has begun drone testing and is doing an R&D partnership with the University of Nevada, Reno.

Experts say the state is focused on building an industry for drone testing, for drone manufacturing and the development of other autonomous systems, such as Google’s self-driving cars, which were tested in Nevada. Mike Kazmierski, president & CEO of the Economic Development Authority of Western Nevada, said that while the drone industry likely won’t replace tourism and gaming-huge economic drivers in southern Nevada-it could have a huge impact in the north.

“Manufacturing is one of our sweet spots,” Kazmierski said. “As we look at the long-term growth of the UAV industry, we see that as a growing segment of our economy.”

On a clear Nevada day–which is to say, almost all Nevada days–from an elevated position, you can see to the horizon in arid desert landscape. Naturally, that makes some people nervous about the state’s lack of any laws regulating commercial or private drone use. (California has introduced bills to regulate how drones can be used by law enforcement, paparazzi, and more.)

“One of the important things we have to consider is how to protect information that comes from the data collected from drones,” said Rebecca Scharf, a privacy expert and law professor at UNLV. Recent research by UNLV’s Center for Crime and Justice Policy showed that most Americans are primarily concerned with drones monitoring them at home. About 63% also are concerned about monitoring in public places.

Public safety also is a concern, no matter how sparsely populated your state is. The FAA currently sets limits on drone testing, prohibiting it from taking place within 5 miles of any commercial airport. Though Nevada is sparsely populated, Scharf said creating the right distance regulations will be important.

“When it comes to regulating drone use, they’d definitely have to look at urban areas very differently from other areas,” she said. “If we had state legislation in place geared at protecting privacy, then we could have a real conversation about how people would be protected.”

But Rapp, of the Advanced Autonomous Systems Innovation Center, said the industry isn’t focused on invading people’s privacy.

“We’re not guiding laser bombs into people’s homes or sitting over their house all night long to spy on them,” he said. ” That’s not where the industry is going. It’s focused on what you can do with the platform.”

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