By Jonathan Wee

An unmanned aerial vehicle (UAV) is an aircraft system without an on board human pilot. They are remotely or autonomously operated transportation platforms.

Combined with a ground station or integrated with other elements, a UAV becomes an unmanned aircraft system (UAS) which can be advanced enough to take off, fly, and land by itself. UAVs can provide many services and there is a growing interest in using them for commercial applications.

UAVs or drones were historically military in nature. The idea is to separate the loss of an aircraft with the loss of human life. Modern aircraft performance can also be limited by the physical boundaries of human beings so remotely piloting them can increase air dominance.

Drones can be fitted with equipment to fill multiple purposes including reconnaissance and surveillance. Armed versions of drones can also provide offensive capabilities, allowing it to destroy an enemy target once identified.

Currently, there is a growing movement for using drones for non combat purposes. Startup companies such as Matternet aim to use UAVs to connect people living in remote areas without access to reliable roads. Recharging at a network of ground stations, Matternet UAVs will carry critical payloads such as medicine and supplies to rural locations.

Schools and organizations are now sponsoring drone development competitions to spur technological advancement, and communities such as www.diydrones.com help individuals make UAVs for personal functions such as aerial photography and mapping.

In the future, drones could integrate with other services to enhance our everyday life. Perhaps when you enter a hotel, a UAV can assist guests as a concierge. Maybe instead of drive-thru windows, a pharmacy can provide a landing pad for individuals to pick up medication using personal drones. Also consider personal companion drones that are an extension of your mobile devices. The possibilities seem endless at this point.

Several hurdles prevent this dream from reality including regulation, air traffic, and information security. Drones also carry a negative public perception and are still relatively costly for mass consumption.

Despite these roadblocks, the Federal Aviation Administration is developing guidelines for civil operation of small UAVs with a target submission date of 2015. Once enabled, we believe this will be the birth of brand new markets with new investment opportunities, and it would benefit investors to watch trends in this sector very closely.