TOKYO -- Japan is set to expand support for its domestic drone industry to alleviate security concerns posed by Chinese-made devices dominating the world market.
The government will submit a bill to parliament as soon as February to make it easier for domestic drone makers to raise money, while increasing procurement of drones for infrastructure inspection and disaster relief.
As drone usage soars around the world, Japanese makers have yet to carve out a significant part of the market due to their small size. Overtaking overseas competition in terms of market share is doubtful, but the government wants to help them improve their technological capabilities while increasing domestic demand through procurement programs.
This effort is well timed. Japan will begin 5G services later this year with drone usage expected to multiply as a result. From fiscal 2022, a streamlined registry for drones will be introduced that paves the way for greater commercial use of drones. The loosened regulatory environment will allow drones to fly over densely populated areas, transmitting real-time aerial data used by industry, agricultural and other sectors.
The global drone market is currently dominated by Chinese manufacturers, with DJI corralling a huge 70% share, according to German research firm Drone Industry Insights. The remainder is split between other Chinese companies and a smattering of French, U.S. and other makers.
The U.S. Department of Homeland Security has warned that Chinese-made drones may be surreptitiously transmitting sensitive flight data to entities in China. Washington has "strong concerns about any technology product that takes American data into the territory of an authoritarian state that permits its intelligence services to have unfettered access to that data or otherwise abuses that access," the department said last year.
A Japanese official echoed this fear. "The fact that almost all drones are Chinese-made is risky," the official said.
In addition to helping promote the drone industry, Tokyo is also ramping up efforts to develop 5G base stations. The new bill will include guidelines to support creation of a secure "advanced information and communication technology utilization system."
Specifically, the legislation will offer eligible domestic makers preferential treatment, such as low-interest loans from public lender Japan Finance Corp. as well as more support from credit guarantee corporations. To be deemed eligible, companies have to demonstrate their ability to secure confidential information, provide a stable supply of products, and adopt global standards.
In the fiscal 2019 supplementary budget, the government wants to allocate funds to "develop base technology for safe and secure drones," in effect supporting development of flight controllers, batteries, motors and other key components.
The government also wants to fund companies trying to make safe drones, along with those emphasizing cost competitiveness to better rival their Chinese peers.
Expanding programs to procure domestic drones for inspecting infrastructure and helping provide disaster relief is also being considered. Starting in fiscal 2020, the government will provide drones to firefighting agencies in all prefectures, enabling damage evaluation even in highly inaccessible locations after fires, typhoons and other disasters.
The Japan Coast Guard will replace its Chinese-made drones with domestic versions and those produced outside China starting next fiscal year.
The government's regulatory reform council will likely propose rules this summer that ease requirements for visual safety inspections of roads, bridges and other infrastructure. The proposals are aimed at reducing the need for physical inspections.
