Cumberland Advisors Market Commentary – Drones

Author: David R. Kotok, Post Date: December 15, 2020

Steve K. got us thinking about drones when he sent an email with three videos, one riveting, one marvelous, and one “downright scary,” all of them about drones. We decided to explore further. We note that we are overweight aerospace and defense in our US ETF portfolios. As you will see, drones are an increasingly used military defense item.

In the first video Steve sent, we watch firefighting drones built by Guofei General Aviation Equipment Manufacturing extinguish, within fifteen minutes, a towering blaze in Chongqing city, China. See “China’s firefighting drones: Unmanned aircraft can extinguish a blazing 10-storey building within minutes,” It’s remarkable footage.

In Steve’s second video we discover a tree-planting drone that can plant 100,000 trees a day, enabling reforestation on a vast scale and at a far lower cost than traditional methods can manage: “Tree planting drone | New application of AI | tree bullets | Biocarbon engineering,” That tree-planting capacity offers serious leverage to apply against formidable deforestation that factors into our changing climate.

For more information about the tree-planting drones and their mission, see “These tree-planting drones are firing seed missiles to restore the world’s forests,” The caveat about shooting tree seeds into the ground and calling it good is that it’s not just trees planted and regrown that make forests function again as ecosystems (that can take more than a century), but that tree planting is followed by other steps recommended by forest ecologists.

The third video, “Slaughterbots,” envisions the capacity of small drones equipped with facial recognition technology to take out “bad guys” (however “bad guys” are defined, and by whom):

If that last offering has you wincing about a dystopian sci-fi future turned real, you’ll be at least momentarily relieved to know that it was a fictional scenario: “This fictional video about AI-powered weapons makes The Terminator look like a Disney film,” The video was created in 2017 by an organization opposed to the development of lethal autonomous weapons.

But the marriage of drone technology with AI facial recognition is actually already here, as Emerj reports:

“Neurala [] offers Neurala Brain, a namesake software which it claims helps drones equipped with cameras recognize and identify predetermined targets and then alert a human operator. Neurala claims its software can comb through crowds to find and identify persons of interest. It can also inspect large industrial equipment, like telephone towers, and generate a real-time damage report.”

A video embedded in the report illustrates the drone finding a missing child:

But Israeli startup Anyvision is already using facial recognition to track Palestinians at army checkpoints on the West Bank, though not via drones ( A report from Georgetown Security Studies maps the ethical landmines that military uses of facial recognition technology may entail:

Drones serve in the military in every imaginable role. Militaries of the world use them for spying, aerial surveillance, recon, assassinations, attacks on buildings/vehicles, jamming electronics, and defusing bombs/mines. Land-rover drones are used for surveillance, demolition, destroying mines/bombs, and carrying equipment; and some are equipped with machine guns that can shoot trespassers on sight. Here’s a guide to drones that are used in the military: “Don’t Just Call Them ‘Drones’: A Guide To Military Unmanned Systems On Air, Land And Sea,” Azerbaijan is using Israeli kamikazi drones against Armenia today (“Israel’s ‘kamikaze’ drones give Azerbaijan advantage over Armenia,”

On a much more upbeat note, UPS has partnered with Rwanda to create “the world’s first national drone delivery service.” Among the types of packages delivered are life-saving medical supplies. Orders for those supplies made via text message can be delivered in about 30 minutes. See the UPS website for a report, including a video: “Life-Saving Drones,”

A Flirtey drone delivers an automated external defibrillator (AED) to treat cardiac arrest
Finally, no one who has ever sat in city traffic can be uninterested in the phenomenon of passenger drones. These vehicles are a reality today and are the basis for taxi services envisioned in places such as Dubai and Guangzhou, China: “List of Manned Passenger Drones and Drone Taxis,” We ponder the day when the skies might be heavily trafficked and wonder how all that sky traffic might be managed safely. But perhaps AI will be up to the task.

Three overviews map the myriad uses and many impacts that drones have, from applications in farming to real estate to disaster response to storm tracking to waste management. Curious?

“Drone technology uses and applications for commercial, industrial and military drones in 2020 and the future,”

“38 Ways Drones Will Impact Society: From Fighting War To Forecasting Weather, UAVs Change Everything,”

“How Drones Are Changing the Business World,”

COVID-19, with all its impacts on business as usual, has accelerated the use of automation in general and drones in particular. See “Flying into the Future: How Drones are Getting the Job Done During the Pandemic,”, along with “COVID-19 accelerates use of drone technology” (video),

The city of Or Akiva in Israel is actually using drones during the pandemic to enforce masking and social distancing. The technology recognizes masks or the lack thereof. We do not picture that happening in the US. See “Israel’s new virus surveillance system detects masks and social distancing; no facial recognition capability,”

Drones will have a profound impact on jobs, of course, as every technological advance does. PwC estimated in 2016 that drones could supplant an astronomical amount of human labor (“Drones could replace $127 billion worth of human labor,” However, a 2018 World Economic Forum study estimates that while automation could replace some 75 million existing jobs, it will also help to create 133 million new ones (“How Drone Technology and Automation Help Create Jobs,”

Drones clearly have an enormous capacity to benefit humanity and, conversely, to realize some dystopian nightmares if our technology outruns our ethics or falls into the hands of the unethical. Facial recognition and other forms of recognition are already in play. Star Wars is no longer fiction.

But, I suppose, if we save the planet and plant enough trees, we may also have some natural cover to protect ourselves. Whether we like it or not, drones have arrived.

David R. Kotok
Chairman of the Board & Chief Investment Officer
Email | Bio

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