Congress’s Drone Ban Threatens American Business With Unintended Consequences
As competition with China continues to grow and inform industrial policy, it’s increasingly seen through the lens of national security. That includes a recent push to ban drones built by DJI, a leading Chinese manufacturer, which misses the mark as neither relevant to security nor good for the economy.
U.S. Lawmakers have introduced the Countering the CCP Drones Act, with the goal of getting it wrapped into the National Defense Authorization Act (considered must-pass legislation) to deadpill the company. The stated reasons being data privacy concerns and national security; but placed in context TikTok collects much more data and dispatches it to China and spy balloons seem to have free reign over the continental United States. This legislative ban would harm American businesses, public safety, and bring significant unintended consequences!
DJI was born in Hong Kong but now operates in China, however labeling it a CCP drone manufacturer is patently false. This logic could effectively shut down any company that happens to spring up or operate in China, a bad precedent to set. The fact is DJI drones are known for their affordable, reliable and advanced tech which earned them overwhelming market share in the U.S. consumer space. Estimates are that between 70% - 90% of the market relies on DJI drones, from real estate agents to firefighters, law enforcement and hobbyists, to roof inspectors.
In short, most consumers across numerous sectors have come to rely on and utilize these small drones. Banning them could disrupt operations across various sectors and hurt small businesses and startups relying on this new digital tool. Companies that specialize in drone services, such as aerial photography or infrastructure inspections, could face significant setbacks. They would need to transition to other brands, perhaps facing delays and additional expenses. The ripple effect could lead to job losses, decreased revenue, and a slowdown in the broader economy as affected businesses attempt to navigate the new landscape.
DJI provides a great product integral to many industries. With no cost-effective alternative most would struggle to find a similar budget friendly product to suit their needs. A complete ban would not only stymy future customers from buying these drones, but also hurt those who already own and operate them. This disruption could lead to increased operational costs and reduced competitiveness, particularly for those unable to quickly adapt to new, potentially more expensive technology.
It would also hurt first responders and public safety personnel who stand by the product effectiveness. These include fire departments that use DJI drones to monitor wildfire situations or police departments that rely on them to help with missing persons or large event monitoring. The bottom line is they have become indispensable.
On the other hand, the U.S. drone industry relies heavily on the competition and innovation driven by major firms like DJI. The company’s dominance has led to technological advancements and set high standards for the industry. Banning DJI could also lead to reduced market competition as other growing manufacturers feel less pressure to innovate or build a better alternative to DJI.
In the long run, restricting access to DJI’s cutting-edge technology could slow the pace of technological progress in the domestic drone industry. Moreover, removing DJI could fragment the market with inconsistent standards and possibly lower-quality products that might hinder the growth of the broader drone market. This fragmentation could complicate regulatory oversight and create uncertainty for businesses and consumers alike. Finally, an outright ban could further strain U.S.-China relations and provoke similar retaliatory actions against other sectors.
While national security concerns must be taken seriously, an outright ban on DJI drones would have detrimental effects on American businesses, public safety, and innovation. Rather than imposing a blanket ban, a more nuanced approach involving strict regulations, enhanced security protocols, and regular audits could address security concerns while preserving the benefits DJI drones bring to various sectors. If legislators step back and focus on a balanced solution, the U.S. can safeguard its interests without undermining the progress and services driven by the industry.
David Hursey is an economic policy expert, having worked for the US House of Representatives, Fidelity Investments, and the Salt Lake Chamber of Commerce.
