DTN News - DEFENSE NEWS: The Booming Business of Drones

Asia News Report: DTN News - DEFENSE NEWS: The Booming Business of Drones
*Drones are everywhere.

Source: DTN News - - This article compiled by Roger Smith from reliable sources By Mitch Joel - Harvard Business Review
(NSI News Source Info) TORONTO, Canada - January 6, 2013: Less than a decade ago, the Pentagon had about fifty unmanned combat air vehicles (known as drones or UAV — unmanned aerial vehicles). It is estimated that they currently have about seven thousand of them (and Congress asked for about $5 billion worth of more drones in 2012). There's a scene in Showtime's hit television series, Homeland, where Nicholas Brody (the former prisoner of war and current United States congressman) is told by David Estes (the director of the CIA's Counterterrorism Center) that the use of drones in the war on terrorism has moved from forty unmanned combat air vehicles to nearly four thousand in no time at all. 

While that was a fictitious scene, it was the type of statement that would make anybody raise an eyebrow. What makes it all that more interesting, is that those fictional numbers aren't even close to the staggering reality of how many drones are in operation. And, that's just the work being done by the United States. The International Institute for Strategic Studies has identified fifty six different types of drones being used in over ten countries (and this data does not include places like China, Turkey and Russia).

Now, drones are moving from the battlefield to your neighborhood, and it's about to create a brand new industry right along with it.

According to the Federal Aviation Administration, the use of commercial drones in United States airspace could become official starting in 2015. As the New York Times wrote in a December 25 editorial: "The drone go-ahead, signed in February by President Obama in the F.A.A. reauthorization law, envisions a $5 billion-plus industry of camera drones being used for all sorts of purposes from real estate advertising to crop dusting to environmental monitoring and police work." But this is just the beginning — industry analysts predict the market to double in less than a decade.
The business and civilian adoption of military technology is nothing new; we had mass adoption of the wristwatch after World War I when soldiers began attaching their pocket watches to their wrists for more practical purposes. A lot of the work and innovation coming out of the Defense Advanced Research Projects Agency (DARPA) is created for military usage, but then becomes commercialized for business application (this includes computer networking and the first hypertext system, which was an early form of the graphical user interface). With so many products that begin as something specialized for the military and then turned over to us every day citizens, it's becoming apparent that drones are on the verge of something big.

So what could a drone-based business look like?

Chris Anderson is the former editor-in-chief at Wired along with being a three-time bestselling business book author (The Long Tail, Free and Makers). He recently left his post at Wired to work on his own passion project-(DIY Drones)-turned-startup (3D Robotics), which recently raised five million dollars in venture funding. He was thinking about drones being used commercially roughly half a decade before the FAA woke up to it. In a 2009 blog post, you can feel the nascent thinking about just how powerful a drone-based network could be for businesses in the not-too-distant future. Fred Smith, the founder of FedEx, then wanted drone usage in his business as quickly as possible. From the post: 

"Unmanned cargo freighters have lots of advantages for FedEx: safer, cheaper, and much larger capacity. The ideal form is the 'blended wing.' That design doesn't make a clear a distinction between wings and body, so almost all the interior of both can be used for cargo. The result is that the price premium for air over sea would fall from 10x to 2X (with all the speed advantages of air)."

The post goes on: "the key thing is having NO people on board, not even as backup. A single person in the craft requires a completely different design, along with radically different economics and logistics. The efficiencies come with 100% robotic operation."

Today, years later, Anderson still doesn't think we're there, just yet. He's currently selling a $500 drone that is a small and light aircraft that is only usable in non-urbanized zones and must follow specific laws to not interfere with FAA authority (which includes carrying payloads and other uses that are currently illegal).

Will the rise of commercial drones — yet more automation — resultant loss of jobs? It's too early to tell, but it's important to remember that we will require a significant labor force to design, program, maintain and organize this type of business. Drone usage at the domestic work level is going to create a significant number of jobs where both the talent and title doesn't even exist today. Imagine the hybrid of aviation, logistics, technology, supply chain management and more that will be required to be an effective employee in the near-future for the drone industry. Will that amount of new labor be able to fully offset those who currently have jobs that can be replaced by drones? It depends on several unknown factors at this moment in time, but change is coming. Increasingly, the stuff we see in science fiction and comic books, becomes a business reality. Fast.

This isn't just about building a better FedEx. The fact remains, that with all of the privacy, legal, and FAA hurdles that will have to be overcome, this is the dawn of a new industry. As Anderson has already stated on countless occasions: the advanced technology that encapsulates a smartphone (GPS, accelerometers, gyroscopes and simple-to-use software and interfaces mixed with sophisticated and light hardware) means that cheap solutions to unmanned air vehicles are a certainty.

Once drones are being used in domestic settings beyond a few niche sectors and wealthy hobbyists — and citizens feel like their privacy is not being breached — it's not hard to imagine businesses and marketers coming up with new and inventive ways to use drones to better commercialize their businesses.

Currently, Geologists like Jan Grygar are using drones to take high-definition photographs, while Simon Jardine and his business, Eye In The Sky, are using drones to sell aerial photography. Interestingly, both Grygar and Jardine have also started companies to manufacture and sell drones to other businesses. "The analogy is closer to the PC coming after the mainframe," Anderson concedes. "Which is to say, that these are not the most powerful drones in the world, but they will be the cheapest and they will be the ones available to regular people. Fundamentally, those people are going to find new applications for the platform that the traditional industries never thought of."

Now, we're beginning to see uses for drones in agriculture, 3D modeling, security (like saving rhinos in South Africa), environmental analysis, news reporting, filming, human rights monitoring and more. Just imagine what will be as more venture capital, entrepreneurs, inventors and every day people start exploring the new business opportunities that drones will create.

I, for one, welcome our new drone overlords.

Copyright © 2013 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.


*Link for This article compiled by Roger Smith from reliable sources By Mitch Joel - Harvard Business Review
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*This article is being posted from Toronto, Canada By DTN News ~ Defense-Technology News Contact:dtnnews@ymail.com 
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DTN News - GEORGIA DEFENSE NEWS: How Russia And Georgia Started A Drone Arms Race

Asia News Report: DTN News - GEORGIA DEFENSE NEWS: How Russia And Georgia Started A Drone Arms Race

Source: DTN News - - This article compiled by Roger Smith from reliable sources By Nicholas Clayton GlobalPost.com
(NSI News Source Info) TORONTO, Canada - October 26, 2012: On the night of August 7, 2008, (TBILISI, Georgia) what military experts and historians say is the world’s first two-sided drone war began.

Georgia, convinced Russia was about to annex its separatist region of South Ossetia, made the first move by bombarding and then invading the separatist capital, Tskhinvali.

What followed was a destructive five-day war that was to a great extent provoked and fought by drones, waking Russia up to the strategic importance of unmanned aerial vehicle (UAV) technology.

The Georgian government lost control over South Ossetia and Abkhazia in the country’s chaotic first years of independence after the Soviet Union fell in 1991.

Four months before the war, as peace talks stalled between Georgia and the de facto governments of its breakaway territories of South Ossetia and Abkhazia the Georgian government began conducting reconnaissance flights over the conflict regions using medium-sized Hermes-450 drones it had purchased from Israel.

Moscow and Georgia’s capital of Tbilisi have frequently clashed over Georgia’s aspirations to join NATO as well as Russia’s increasing support to Georgian separatists, but the conflict intensified as the drones started to go down.

Three to seven Georgian drones were shot down over Abkhazia in April and May 2008. Each side offered conflicting information on the number of incidents and aircraft involved.

Georgia accused Russia, which maintained a peacekeeping contingent in each of the territories, of committing a “military aggression” on sovereign Georgian territory by shooting down the drones. On one occasion, Georgia produced video transmissions from one of its downed drones, showing a fighter jet shooting it with a missile. A subsequent UN report found that video proved Russia had shot down the drone using either a MiG-29 or Su-27 fighter.

These drone incidents highlighted a grey area of international laws and treaties pertaining to disputed territories and the use of unarmed, unmanned aircraft.

The 1994 Moscow Agreement was signed by the parties of the 1993-1994 Georgian-Abkhaz conflict and dictated that heavy weapons and military aircraft would not be allowed in or around the conflict zone. Both the UN and the Organization for Security and Cooperation in Europe (OSCE), which had observers deployed in Abkhazia, found that Russia violated the Moscow Agreement by sending the fighter to shoot down the Georgian drone.

However, the UN found that Georgia also violated the ceasefire because “a reconnaissance mission by a military aircraft, whether manned or unmanned, constituted ‘military action.’”

US Deputy Representative to the United Nations Alejandro Wolff protested the decision at the Security Council saying the Moscow Agreement “at best is unclear on this issue” and highlighted that the shootdown was a “very dangerous development, highly provocative” and a “violation of Georgia’s sovereignty and territorial integrity.”

On the ground, the UN argued, the drone flights were “bound to be interpreted by the Abkhaz side as a precursor to a military operation,” but in his book “A Little War That Shook the World,” which chronicles the conflict and its causes, Ronald Asmus asserted that by shooting down the drone over internationally recognized Georgian territory, Russia committed the first “military aggression” of the war. In the end, the incident reinforced the notion on each side that the other was preparing to attack.

In the three months following the UN’s ruling, border skirmishes continued and escalated leading to Georgia’s offensive against Tskhinvali and a massive Russian counterattack that killed hundreds and caused over $1 billion in damage to Georgia.

After the war, Russian officials and military analysts said much of the blame for the military’s performance was due to the poor quality of its drone fleet.

To begin with, Russia’s drones were late to the battlefield as Russian Defense Minister Anatoly Serdyukov initially forgot to sign an order authorizing their use. Unable to gain real-time intelligence on the ground, the Russian top brass sent fighter jets and long-range bombers on reconnaissance and close air support missions before Georgia’s air defenses were neutralized, leaving them vulnerable to being shot down.

Russia defense expert Roger McDermott wrote that as “calamitous” as Russia’s losses due to poor intelligence were, they could have been much greater if Georgia used its air-defense platforms more efficiently.

By contrast, the Georgian military was viewed as effective in its initial maneuvers, backed by intelligence provided by its Hermes-450s and other smaller Israeli-made drone models. The Hermes-450 is similar in size and capabilities to the US military’s Predator, which has been heavily used for missions across the Middle East.

Russian officials later disclosed that the only drones it operated during the war were outdated domestic models developed in the late 1970s-early 1980s and several were lost. Furthermore, even the most advanced Russian-designed drone in the air at the time, “demonstrated many problems, among them a distinct acoustic signature audible from a long distance, which, coupled with its low [flight] ceiling, yielded high vulnerability to ground fire,” said Vladimir Popovkin, head of the Defense Ministry’s procurement wing.

However, if Russia was drone-poor and Georgia drone-rich before the conflict, everything changed when Israel switched sides.

Less than a year after the war, Russia announced it had bought 12 drones of varying sophistication for $53 million from state defense contractor Israel Aerospace Industries (IAI), and in October 2010, the two sides agreed to a $400 million joint venture agreement to produce dozens more. Jamestown Foundation Russia expert Pavel Felgenhauer called the deal “the biggest defense technology transfer deal between Russia and a Western nation since 1945.”

Russia is expected to continue to expand its drone arsenal, although its attempts at producing quality drones domestically have been largely fruitless and hardliners in Moscow have strongly resisted the military’s limited foreign purchases. Nonetheless, Russian President Vladimir Putin specifically underlined the development of Russia’s drone capabilities as a priority in a campaign essay ahead of his election in March and has said that Russia intends to spend $13 billion on drones by 2020 as a part of its military modernization.

Meanwhile, the fate of the drone deals between Georgia and Israel played a major factor in the quick deterioration of what Caucasus expert Michael Cecire described as a “love affair” turned “messy divorce.” Pre-2008, Israel enjoyed arguably its strongest ties in the region with the pro-Western government of Georgian President Mikheil Saakashvili. Israel sold Georgia 40 drones, anti-aircraft equipment, and trained Georgian infantry through private defense firms.

In the run-up to the war, however, Russia put heavy pressure on Israel to cancel its arms deals with Georgia, and publicly implied it would consider selling advanced equipment to Israel’s enemies if it did not give in. Israel acquiesced two days before the start of the conflict, a move that Georgian Minister for Reintegration Temur Yakobashvili, now ambassador to the US, slammed as “a disgrace.”

"Israel did it at the Russians' behest. It aided the terrorists, the Russians. It's a disgrace. I don't know what it received in return, I only see that Hezbollah continues to get Russian arms, and plenty of [them],” Yakobashvili told Haaretz at the time.

In April 2011, Israeli private defense contractor Elbit Systems, which supplied Georgia’s Hermes-450s and other drones, sued the country for $100 million for allegedly failing to pay for equipment. The two sides later settled the dispute with Georgia paying Elbit $35 million and returning “certain equipment and subsystems.”

Furthermore, in emails from private intelligence firm Stratfor leaked by WikiLeaks earlier this year, a Mexican source alleged that the Georgian government believed that Israel had also provided Moscow with the “data link codes” for its Hermes-450 drones, allowing Russian forces to hack them and force them to crash. This came supposedly in return for intelligence on air defense systems Russia had sold Iran.

The source, which Stratfor described as close to Mexican defense contractor Hydra Technologies, said Georgian officials were “frantically” looking for drones to replace its Israeli fleet, which they believed had been “compromised.”

Several defense industry sources told GlobalPost that it was extremely unlikely Israel would agree to such an intel exchange and doubted the credibility of Stratfor overall. Furthermore, Nick Turse, author of the ebook “Terminator Planet: The First History of Drone Warfare, 2001-2050,” said that there are a number of things that could bring down drones in a conventional warfare scenario, and drones are not particularly difficult to hack even without data link codes.

“Even Iraqi insurgents were able to hack drone feeds. So, we’re not talking about sophisticated military technology here,” he said. “In a traditional air war, drones would be decimated by conventional piloted aircraft, and modern air defense systems would make minced meat out of Predator and Reaper [type drones].”

Nonetheless, while unveiling what he said were a new line of Georgian-designed-and-produced drones in April, President Saakashvili implied he believed Israel had given Russia the codes.

“When you procure from abroad, a seller may not give you a full technology or may share technology [bought] by you to your adversary,” Saakashvili said, as cited by news website Civil.ge. “No one will share this [pointing to the Georgian-made drone] with others.”

A month earlier he was quoted as saying it was important Georgia was producing its own drones because “someone may cheat you or share data to others or refuse [to sell weapons] at a decisive moment.”

Contrary to Saakashvili’s claims, however, Georgia is still not fully self-sufficient in its drone technology. Shortly after the president presented the drones, military bloggers noted that the supposedly Georgian-designed drones bore a strong resemblance to the Swan, a small drone produced by private Estonian defense contractor ELI.

Estonian defense attaché to Georgia Riho Uhtegi confirmed to GlobalPost that the drones were designed by ELI and licensed to Georgia for production. Since the war, Georgia has complained of being under an unofficial arms embargo, even from its Western partners and has publicly demanded weapons systems to replace equipment it lost during the war — specifically drones, air defense and anti-tank weapons.

The Estonian drone contract was the biggest arms deal Georgia has made, albeit secretly, since the conflict and Uhtegi said it was necessary for Estonia to gain approval from other NATO member countries before making the sale.

Still, drone industry experts also emphasized that the Estonian Swans are a big step down from the medium-sized Israeli Hermes-450. The Swan has limited range and altitude and must be launched by a mobile catapult while only being able to land via parachute.

“It’s sort of like comparing a Yugo to a Honda. They’re both cars, they both carry people, but they’re not in the same class,” one expert said.

Nonetheless, Irakli Aladashvili, editor-in-chief of the Georgian military journal Arsenali, said that drones continue to be essential for Georgia because they offer the cheapest way for a small country to scout enemy territory.

“Drones are the best intelligence devices after satellite surveillance. Obviously, the small countries of the South Caucasus can’t afford to put satellites into space, so [drones] are important,” he said.

The first drone war showed that drones can have a major impact on combat, but Turse said they are not necessarily a game-changer on the battlefield.

“For the last 100 years or so, there’ve been these wonder weapons that come around that are supposed to revolutionize warfare and give one nation a tremendous advantage — from tanks to machine guns. But whenever wonder weapons appear, countermeasures develop. War always seems to find a way,” he said.

However, even if drones do not prove to be crucial in winning conventional wars, Turse says they are likely to help start some new conflicts as international law has been slow to adapt to the new realities and the US has “written the rulebook” on their usage. Those “rules,” he said, include the mentality that violating another country’s territory with a robot isn’t a violation at all.

“I think this is embedded in the thinking on this. The US has been violating the sovereignty and airspace of countries for decades now with airplanes and the fact that there are no pilots in these things, the leadership feels like that gives them license to do it, even though there is no fundamental difference between violating it with a piloted plane or a robot plane,” he said.

The legality of such actions is even less clear amid territorial disputes, and, the de facto government of South Ossetia announced in September that it was working on measures to shoot down the Georgian drones it frequently spots in what it considers to be its sovereign territory, leading to fears that an escalation similar to 2008 could repeat itself.

*Link for This article compiled by Roger Smith from reliable sources By Nicholas Clayton GlobalPost.com
*Speaking Image - Creation of DTN News ~ Defense Technology News 
*This article is being posted from Toronto, Canada By DTN News ~ Defense-Technology News Contact:dtnnews@ymail.com 
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DTN News - DEFENSE & INTELLIGENCE NEWS: China's Cyber Thievery Is National Policy—And Must Be Challenged

Asia News Report: DTN News - DEFENSE & INTELLIGENCE NEWS: China's Cyber Thievery Is National Policy—And Must Be Challenged
*It is more efficient for the Chinese to steal innovations and intellectual property than to incur the cost and time of creating their own.
Source: DTN News - - This article compiled by Roger Smith from reliable sources WSJ – Mike McConnell, Michael Chertoff, William Lynn
 (NSI News Source Info) TORONTO, Canada - February 5, 2012:Only three months ago, we would have violated U.S. secrecy laws by sharing what we write here—even though, as a former director of national intelligence, secretary of homeland security, and deputy secretary of defense, we have long known it to be true. The Chinese government has a national policy of economic espionage in cyberspace. In fact, the Chinese are the world's most active and persistent practitioners of cyber espionage today.

Evidence of China's economically devastating theft of proprietary technologies and other intellectual property from U.S. companies is growing. Only in October 2011 were details declassified in a report to Congress by the Office of the National Counterintelligence Executive. Each of us has been speaking publicly for years about the ability of cyber terrorists to cripple our critical infrastructure, including financial networks and the power grid. Now this report finally reveals what we couldn't say before: The threat of economic cyber espionage looms even more ominously.

The report is a summation of the catastrophic impact cyber espionage could have on the U.S. economy and global competitiveness over the next decade. Evidence indicates that China intends to help build its economy by intellectual-property theft rather than by innovation and investment in research and development (two strong suits of the U.S. economy). The nature of the Chinese economy offers a powerful motive to do so.

According to 2009 estimates by the United Nations, China has a population of 1.3 billion, with 468 million (about 36% of the population) living on less than $2 a day. While Chinese poverty has declined dramatically in the last 30 years, income inequality has increased, with much greater benefits going to the relatively small portion of educated people in urban areas, where about 25% of the population lives.

The bottom line is this: China has a massive, inexpensive work force ravenous for economic growth. It is much more efficient for the Chinese to steal innovations and intellectual property—the source code of advanced economies—than to incur the cost and time of creating their own. They turn those stolen ideas directly into production, creating products faster and cheaper than the U.S. and others.

Cyberspace is an ideal medium for stealing intellectual capital. Hackers can easily penetrate systems that transfer large amounts of data, while corporations and governments have a very hard time identifying specific perpetrators.

Unfortunately, it is also difficult to estimate the economic cost of these thefts to the U.S. economy. The report to Congress calls the cost "large" and notes that this includes corporate revenues, jobs, innovation and impacts to national security. Although a rigorous assessment has not been done, we think it is safe to say that "large" easily means billions of dollars and millions of jobs.

So how to protect ourselves from this economic threat? First, we must acknowledge its severity and understand that its impacts are more long-term than immediate. And we need to respond with all of the diplomatic, trade, economic and technological tools at our disposal.

The report to Congress notes that the U.S. intelligence community has improved its collaboration to better address cyber espionage in the military and national-security areas. Yet today's legislative framework severely restricts us from fully addressing domestic economic espionage. The intelligence community must gain a stronger role in collecting and analyzing this economic data and making it available to appropriate government and commercial entities.

Congress and the administration must also create the means to actively force more information-sharing. While organizations (both in government and in the private sector) claim to share information, the opposite is usually the case, and this must be actively fixed.

The U.S. also must make broader investments in education to produce many more workers with science, technology, engineering and math skills. Our country reacted to the Soviet Union's 1957 launch of Sputnik with investments in math and science education that launched the age of digital communications. Now is the time for a similar approach to build the skills our nation will need to compete in a global economy vastly different from 50 years ago.

Corporate America must do its part, too. If we are to ever understand the extent of cyber espionage, companies must be more open and aggressive about identifying, acknowledging and reporting incidents of cyber theft. Congress is considering legislation to require this, and the idea deserves support. Companies must also invest more in enhancing their employees' cyber skills; it is shocking how many cyber-security breaches result from simple human error such as coding mistakes or lost discs and laptops.

In this election year, our economy will take center stage, as will China and its role in issues such as monetary policy. If we are to protect ourselves against irreversible long-term damage, the economic issues behind cyber espionage must share some of that spotlight.

Mr. McConnell, a retired Navy vice admiral and former director of the National Security Agency (1992-96) and director of national intelligence (2007-09), is vice chairman of Booz Allen Hamilton. Mr. Chertoff, a former secretary of homeland security (2005-09), is senior counsel at Covington & Burling. Mr. Lynn has served as deputy secretary of defense (2009-11) and undersecretary of defense (1997-2001).

*LINK FOR THIS ARTICLE COMPILED BY ROGER SMITH FROM RELIABLE SOURCES WSJ – MIKE MCCONNELL, MICHAEL CHERTOFF, WILLIAM LYNN

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