The Institutional Imperative & The Struggle for Economic Growth
Steeling your rights in broad daylight
Thank you to everyone for reading and your feedback has been very helpful. Any suggestions and introductions are welcome. To learn more about what we are building and how to get involved you can reach me at jonathan@skytrades.io or @droneevtol. I hope you enjoy this weeks newsletter.
The Institutional Imperative
Within the realm of government bodies, a force known as the institutional imperative holds power over decision-making processes and people. This imperative often goes unnoticed, resulting in misguided actions and costly errors. The institutional imperative is endemic within government institutions and the supporting remoras. Hat tip to Warren Buffet, Patrick Collison et al.
One prominent manifestation of the institutional imperative is the innate resistance to change observed within government bodies. These institutions tend to maintain their current direction, disregarding the need for adaptation as this need is not seen as a priority. This resistance often stems from a deeply ingrained culture, bureaucracy and a reluctance to deviate from established practices.
The institutional imperative further manifests itself in the allocation of available funds. Government bodies often find projects to absorb their financial resources and protect the status quo. This leads to inefficiencies as resources are directed towards endeavours that do not deliver optimal outcomes for the public.
Government leaders, despite their positions of authority are not immune to the influence of the institutional imperative. Even if their desires or initiatives are ill-conceived, studies and analyses conducted by junior staff often serve to substantiate and reinforce these ideas. This unquestioning support leads to misguided decisions, hindering effective governance and stifling innovation.
An additional manifestation of the institutional imperative is the tendency for government bodies to imitate the behaviour of other government bodies. This behaviour can lead to a lack of diversity in approaches and limit the potential for innovative and effective governance.
There are ways to mitigate this in theory. It requires a cultural shift towards an openness for change, a willingness to critically evaluate resource allocation, and the establishment of robust decision-making processes that challenge leaders' desires. Encouraging independent thinking and fostering an environment that rewards innovation and risk-taking can help counteract the negative effects of the imperative.
It is highly unlikely that these changes will happen at the pace most entrepreneurs want them and the economic engine requires them to in order to pull people out of poverty and show real growth.
Where does that leave us. Forever destined to wait for the structurally unable and culturally unwilling to light the fires of growth?
Pizza in Seattle Skies
Pagliacci Pizza has revealed plans to introduce drone delivery services in the Seattle area, in partnership with drone company Zipline.
By utilising drones, the company can overcome distance and accessibility limitations, ultimately enabling faster and more convenient deliveries. The pizza company has been actively striving for carbon neutrality. By utilising drones, the pizza chain aims to scale its delivery operations sustainably, reducing emissions by up to 97% compared to conventional car deliveries.
Zipline's drones have a delivery radius of 10 miles and fly up to the immediate reaches of 300 feet. They have partnered with various companies, including Sweetgreen. The startup was founded a decade ago and still has not reached scale, but this is not due to the technology that allow drones to fly being unavailable, it’s due to the air space to fly in being legally unavailable. Flight with drones has been achievable for many years.
The drone company initially focused on delivering medical supplies in Africa. With significant backing from venture capital firms like Sequoia Capital and Andreessen Horowitz, Zipline recently secured $330 million in funding, valuing the company at nearly $4.2 billion. This expansion into Washington state follows their earlier announcement that it would begin flying medical supplies over property without the permission of the air rights owners in Tacoma from 2024.
Zipline is an impressive business and their work in Africa is truly life changing to many. In the US however the business and its backers are relying on stomping over peoples property and air rights.
Drones Used To Deliver Blood Bags In Delhi
Drones were successfully employed to transport blood bags in Delhi, marking a significant development in the delivery of emergency medical supplies. This pioneering use of drones for blood delivery is a first in India. Dr. Rajiv Bahl, Director General of ICMR, expressed optimism about the results of the experiment, highlighting the drones' ability to maintain proper temperature and prevent any damage to the transported products. Further tests comparing the drone and ambulance delivery methods will determine whether this technology will be implemented nationwide.
Unmanned aerial vehicles (UAVs) have previously been utilised to distribute medicine during the COVID-19 crisis. Known as the 'i-DRONE' project, it aimed to assess the feasibility of using drones to transport vaccines and medical supplies to remote areas with challenging geographical terrains, including islands, hills, and foothills. In October 2021, the project successfully delivered COVID-19 vaccines, routine immunisation vaccines, antenatal care medicines, syringes, gloves, and multi-vitamins to Manipur and Nagaland. Notably, the longest drone flight covered approximately 40 km, transporting 3,525 units of medical supplies from Mokokchung to Tuensang in Nagaland. Overall, a total of 17,275 units of medical supplies were distributed through drones in Manipur and Nagaland.
In response to the project's accomplishments, the Indian Council of Medical Research (ICMR) released guidelines in June 2022 to facilitate the use of drones in healthcare. These guidelines were established to ensure widespread access to medicines, vaccines, and other medical essentials, particularly in geographically challenging regions of the country.
Air Taxis in Japan
Wisk Aero, an air taxi startup, has partnered with Japan Airlines (JAL) to introduce autonomous electric vertical takeoff and landing (eVTOL) services in Japan. The collaboration aims to develop plans for the operation and maintenance of Wisk's autonomous air taxis, with the ultimate goal of offering everyday autonomous flights to the public. This agreement is expected to promote advanced air mobility (AAM) in the Asia-Pacific region.
To facilitate this initiative, Wisk Aero, JAL, the Japanese Civil Aviation Bureau (JCAB), and other government agencies have signed a memorandum of understanding (MOU). The MOU outlines the collaborative effort to establish regulatory requirements, safety measures, and community benefits associated with Wisk's sixth-generation eVTOL aircraft.
The sixth-generation air taxi, designed to carry four passengers and has a 90-mile range, a cruising speed of 120 knots, and the ability to operate at altitudes between 2,500 ft and 4,000 ft.
Key aspects of the MOU include research on fleet operations, certification approval, and maintenance requirements. Additionally, it paves the way for Wisk to obtain an air operator's certificate in Japan, conduct demonstration flights, and integrate autonomous aircraft into the national airspace system.
Japan is among several countries actively developing air taxi services as part of the future of air transportation. The nation plans to showcase these innovative aircraft during the 2025 World Expo in Osaka. Five or six air taxi vendors will participate in the Expo, offering eight air taxi routes to connect different destinations in Japan and facilitate transportation for event attendees. These air taxis, capable of accommodating two to five passengers each, are set to be a prominent attraction at the Expo.
Last Mile Aviation in Spain
An air taxi company, NetxNorth, is aiming to launch its services in the Balearic Islands in 2024, becoming the first of its kind in the region. NetxNorth is currently seeking authorisation from the European Union Agency for Aviation Safety (EASA) to operate its aircraft, which resemble manned drones and have vertical take-off and landing capabilities, accommodating up to five passengers. Prices for the air taxi service will start at ninety euros.
Drawing on its experience providing services during the Qatar World Cup, the company has chosen to establish itself in the Balearic Islands, offering an air taxi service utilising electric aircraft. The flights will primarily operate within the islands, connecting Mallorca, Ibiza, Formentera, and Menorca, serving as an alternative to traditional air routes, boats, and roads.
NetxNorth aspires to be at the forefront of the emerging last-mile aviation sector, providing customers with a new mobility option that can significantly reduce travel time by up to 80%. Additionally, the company aims to reduce carbon emissions by utilizing clean energy to power the eVTOL (electric vertical take-off and landing) aircraft.
Fundamental Rights Are Stronger Than Steel
The Steel-man argument for the FAA and NASA having control over low altitude airspace above private property and anointing some drone and eVTOL businesses can be distilled into four key areas: Safety, Security, Centralised Governmental Control, Existing Commercial Aviation.
Safety. The FAA and NASA can ensure airspace safety by establishing regulations, safety standards, and traffic management procedures, reducing accidents and mitigating risks as they have done in commercial aviation for decades.
Security. Control over airspace allows protection against unauthorised activities and potential security threats near sensitive areas and critical infrastructure.
Centralised Governmental Control. Centralised control enables the complete ownership of air traffic management, coordinating flight paths, and potentially reducing congestion and delays if urban air mobility was to be approved by the faceless technocrats.
Commercial Aviation. Regulatory power allows the FAA to coordinate with airlines, airports, and many existing vested interests, ensuring standardised procedures and safe integration of commercial aircraft oligopolies.
What becomes apparent in this argument is the desire for the complete removal of personal air and property rights.
There is a strong argument for decentralisation in many facets of our lives. The drive for centralised control and the erosion of individuals air rights looks to be the thin end of the wedge. This centralised control land grab can been seen in other areas, from banking, to aviation and right through to energy policy.
Property owners have inherent rights to control and use the low altitude airspace above their land. This principle is supported by legal cases such as Causby v USA, where the Supreme Court recognised landowners' property rights in the immediate reaches of airspace above their property. Legislators in most US states have also taken the Supreme Courts ruling and legislated for this.
Many of the larger drone operators and users of their services like Walmart, Alphabet (Wing) and Zipline coupled with centralised government advocates are pushing aggressively for property rights to be taken. This is concerning, the consolidating powers of government and industry are trying to take peoples property, rights and freedoms.
The Fifth Amendment of the US Constitution protects property rights, stating that private property shall not be taken for public use without just compensation. Allowing the FAA and NASA to control low altitude airspace without compensating property owners for the use of their airspace is a violation of these rights.
The government's control over low altitude airspace above private property could be considered an exercise of eminent domain. For the exercise of eminent domain to be lawful, there must be a clear public purpose and just compensation provided to affected property owners.
The Takings Clause of the Fifth Amendment requires the government to provide just compensation when private property rights are taken for public use. The control of low altitude airspace by the FAA and NASA is a taking of property rights, requiring fair compensation for affected landowners.
Property owners having control over their low altitude airspace promotes decentralised decision-making, respects local community values and individual property rights. It allows for tailored solutions that consider unique characteristics and needs of different locations, fostering innovation and flexibility.
In SkyTrades.io we are building the system which allows control to all property owners and municipalities over their air rights. Unlocking massive economic growth in Urban Air Mobility while respecting air and property rights, which is our north star. jonathan@skytrades.io