The Drone Market in 2021 and Beyond: 5 Key Takeaways

Lukas Schroth
August 10, 2021
5 min. read

How will the drone market in 2021 develop through the next 5 years? Our flagship Drone Market Report 2021-2026 is out and ready to provide the answer to this and many other questions. As we do every year, we break down the drone market by segment, industry, and region as well as various combinations of these (e.g. market size broken down by industry per country). To mark the release of our latest report, here are 5 market observations and trends about the drone market in 2021-2016.

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Originally published: August 2021

1. The drone market in 2021 will grow at 9.4% CAGR and reach US$41.3 billion by 2026

Looking at the big picture, the drone market is currently worth US$26.3 billion, and it will continue to grow. Our market model forecasts a 9.4% CAGR (Compound Annual Growth Rate) at the global level, largely driven by the growth of commercial rather than recreational drones. This is of course lower than last year’s estimate, but one reason for this is the impact of the COVID-19 pandemic, which we will return to later. The main takeaway is that this is still a relatively stable growth, which will help the drone industry reach US$41.3 billion in revenue by 2026. To put this into context, the global helicopter market is currently valued at US$48.2 billion by Statista; drones will likely reach this number within a decade even though helicopters have been around for much longer.

2. A service-oriented drone market

When the drone market is split into 3 segments (hardware, software and services) it becomes clear that it is a service-oriented market. Roughly 78% of global drone-related revenue is generated through services rather than hardware or software. This segment is set to grow at a rate of 9.6% CAGR and reach US$30.7 billion by 2026. The service segment is mainly driven by business-internal drone activities, i.e. companies that use drone technology for their internal business processes. This share is over 70% within services today and will increase in the future. The second largest share is held by so-called Drone-Service-Providers (DSPs), who offer their services to third parties (which include deliveries, inspections, and a plethora of other applications).

3. Revised industry definitions, yet Energy is still king

This year’s market model uses slightly revised industry definitions that paint a more precise picture of the drone market than the North American Industry Classification System (NAICS) we already used as a basis for the last drone market reports. Among a few other minor changes, we expanded the number of industries from 15 to 17 by making the sub-industries for police and firefighting and Cargo, Courier Services, Intralogistics and Warehousing stand-alone major categories. The increasing relevance of drone deliveries as well as the implementation of drones into police and firefighting justify their own category for the drone industry.

Categorizations aside, the Energy sector is still and will continue to be the top industry for commercial drones, followed by Construction and Agriculture. Not surprisingly, the fastest-growing drone market in 2021 and beyond will be Cargo, Courier, Intralogistics and Warehousing with a CAGR of 24.3%. This is due to the increased popularity and demand of drone deliveries for both internal (intralogistics and warehousing) as well as external services. Given the headlines about drone deliveries for coronavirus test kits and vaccines, this is one way in which the global pandemic had a positive impact on the drone industry.

Want to Know More About the Drone Market in 2021 and Beyond? Check Out Our New Report!

Drone-Market-Report-2021-3D Cover Page

Report | Drone Market Report 2021-2026

• Extensive 232-page global drone market report with updated data and market model
• Includes drone market size, forecast 2021-2026, market developments & regulations
• Breakdown by segment (hardware, software, services), by industry sector (Energy, Construction, Agriculture, etc), by application method (e.g. Mapping & Surveying, Inspection, and Delivery among others), by region, and in-depth look into the top 10 countries for drones.

4. COVID-19: the drone market in 2021 at a turning point

There is no denying that the pandemic hurt all industries. However, the data paints an interesting story about where the drone market may be headed. For starters, drone companies continued to grow through all of 2020, which includes the peak of the pandemic. So despite layoffs and decreased revenues, the drone market in 2021 showed resilience. Secondly, there was a record number of investments, in the commercial drone space. Therefore, it is clear that a lack of economic activity in markets did not scare investors away from drone technology. Perhaps investors saw how drones can help drive the remotization of work and streamline business processes. Lastly, the aforementioned increased use of drones for COVID-19 test kits, vaccines, and pharmaceutical goods may have shown more of the potential benefits of drone delivery. Last year we noted that drone companies like Zipline and Wing have been able to deliver and scale their solutions quicker than previously expected, and the impact is even more noticeable after several more months of lockdowns throughout the world.

All of this explains why there may be a turning point for the global drone market in 2021. There have been both negative and positive impacts, so it is hard to speculate what the actual long-term effect of the pandemic will be. However, if drone companies capitalize on the increased investments and positive attention to drone technology, then the industry could profit from the often-cited K-shaped recovery and grow even faster than our data suggests.

5. Regional markets: Latin America and India rising

Not surprisingly, Asia continues to be the biggest region for drones, and the US and China still dominate the drone market in 2021. The Asian market will grow to US$16.5 billion while the US and China will grow at 6.8% and 9.7% CAGR respectively. Perhaps most-interestingly, however, is the growth rate of both South America as a region and India at the country level. The South American market will grow at 11.3% CAGR, led by Brazil in absolute terms (currently a US$373 million market) and by Argentina in terms of CAGR (14.3%). Meanwhile, India will grow at an astonishing 20.6% CAGR, which fits with the idea that many developing countries will start benefitting more and more from drone technology.

The Drone Market Report 2021-2026 in a nutshell

These are some of the highlights from our extensive 240-page analysis. Our report studies the global market by segment (hardware, software, services), by industry sector (Energy, Construction, Agriculture, etc), by application method (e.g. Mapping & Surveying, Inspection, and Delivery among others) and provides a more in-depth look into all regional markets as well as a deeper analysis of the top 10 countries for drones. In addition, it includes unit sales, the latest developments in drone regulation, and a chapter on emerging technologies which will enhance or lead to new drone applications.

The future often brings unforeseen challenges which can have a deep and lasting impact on economies throughout the world. That is what COVID-19 did, and that is why we revise our data and predictions every year. So the Drone Market Report 2021-2026 represents the latest and most comprehensive information about the drone market in 2021 and where it is headed after the pandemic.

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Download our FREE Drone Market in 2021-2026 Infographic

This infographic, “Drone Market in 2021-2026”, which shows market growth in the next 5 years, including CAGR and breakdown of current market by segment.

You might also be interested in:

The Drone Market Report 2021-2026
Drone Investment Database 2021
Drone Application Report 2021
Drone Manufacturer Ranking 2020
Drone Service Providers Ranking 2020
Drone Regulation Report 2020
Counter-Drone Market Report 2020
Drone Delivery Report 2019