The posts have been sparse since I’ve been juggling a full-time job, my active Navy Reserve duty, and the blog; but I am back in the saddle and look forward to bringing you more UAS-related posts.
While I was in San Diego, an article caught my eye about that region. 3D Robotics, possibly the best-known domestic manufacturer of consumer UAS, was highlighted in an article about their cross-border production model. Jordi Muñoz, the co-founder and Chief Technical Officer of 3D Robotics, was born in Mexico and is now a permanent resident of the United States – he also made the Forbes list of 30 under 30. Mr. Muñoz started making model rockets at 8 when his father, a psychiatrist, would bring back parts from his travels to San Diego. Now, Mr. Muñoz is using the same cross-border entrepreneurial spirit to go up against the Chinese drone powerhouse, DJI.
3D Robotics is the second-best funded American drone start-up. At $35 million, only Airware has them beat (I discussed Airware in an article about using drones to combat poaching). The CEO of 3D Robotics, Chris Anderson, was the editor of Wired Magazine and founder of DIYDrones.com when he met Mr. Muñoz, and they co-founded 3R Robotics. The company is best known for its Iris+ drone, but produces more advanced UAS as well.
What really caught my eye about the article was how 3D Robotics has broken up various aspects of its product development based on the strengths of various regions. Specifically, the company’s headquarters are up in Berkeley, CA where they can leverage Mr. Anderson’s location and the Silicon Valley connections. Engineering is based in San Diego. This is Mr. Muñoz’s home, and also the location of a lot of a workforce aligned with the highly-technical defense contractors. For example, General Atomics is headquartered in La Jolla and Northrop Grumman unmanned aircraft division is northeast of San Diego in Rancho Bernardo. As discussed in previous posts, General Atomics makes the Predator and Reaper while Northrop Grumman makes the Global Hawk. Finally, manufacturing is based in the Mexican State of Baja California.
I looking into this arraignment, particularly the Mexican manufacturing, and find it quite innovative. To that end, I met with Dr. Christina Anne Luhn of the CaliBaja Bi-National Mega-Region. The group was formed in 2008 and received their initial funding from the Department of Commerce’s Economic Development Administration. They are using a mega-region concept for the future of economic activities in the United States and have a number of private corporations and public entities as partners. The San Diego, Imperial Valley, and Tijuana Economic Development Corporations are all partners.
What is CaliBaja? San Diego County has joined forces with Imperial County (which extends east of San Diego County to the Arizona border), and Baja California. Here is a map of American “mega-regions.” Also, an article called “Jobs Without Borders” contains a significant amount of data on the mega-region and is available here.
The groups cites a quote from Richard Florida: “China is not our real competitor. Rather, we should be thinking about the great mega-regions around Shanghai, Beijing and the Hong Kong-Shenzhen corridor.” (Please note that the original version of this post attributed this quote to CaliBaja, who graciously advised me that it was from Mr. Florida, a pioneer of the mega-region concept). This is forward-thinking, and something that will help us compete in a new global economy. CaliBaja is working to link the knowledge-based economy of San Diego with agricultural Imperial County and the manufacturing base in Baja California. Dr. Luhn said that there is less cross-border tension from Imperial County as with San Diego County, perhaps because of the large number of dual citizens who reside there. This is also something that CaliBaja is using to their advantage.
Dr. Luhn spoke at length about the manufacturing in Baja California. There are five major cities in the Mexican State, with the closest being Tijuana. She recognized that there is a bias in many minds against Mexican manufacturing. However, reality has evolved past this outdated perception. She has visited the factories and they are sophisticated, clean, and staffed by second or even third generation employees. The latter comment is important because it means that a base of knowledge has developed and that the people in the factories are there for careers, not just to scratch out a living. Baja California is far from the Mexican capitol and has an entrepreneurial spirit – even many in Mexico City don’t understand the State’s level of manufacturing sophistication.
Companies such as Kyocera, Sony, and Solar Turbines were utilizing the cross-border resources before CaliBaja were developed, but the group is coordinating this effort. For example, private investors are building a pedestrian bridge from the Tijuana airport to San Diego to facilitate traffic and commerce between the two countries. NAFTA broke down some of the regulatory hurdles, but some still do exist – a major one being the time it takes waiting to cross the border. The bridge should be completed by the end of the year.
There are other hurdles as well – public perception being one, particularly with defense manufacturing. Others are issues I’ve written about, particularly export compliance. Sophisticated companies will already have international trade compliance structures in place to address the Export Administration Regulations (i.e.: unarmed non-military UAS and related components) or International Traffic in Arms Regulations (i.e.: armed, military UAS and various sub-components), but it takes time and some money for a smaller business to get a compliance program up and running. And sometimes, manufacturing in Mexico is all but foreclosed – most clearly with the MTCR-controlled Predator, Reaper, and Global Hawk.
Dr. Luhn referred to the phenomenon as “near-sourcing” and “co-production.” Some may feel that this is taking jobs out of the U.S., but the financial reality is that we cannot compete globally if all aspects of production remains domestic. Our options are often either cooperative cross-border groups, or watch manufacturing go far overseas.
3D Robotics has leveraged the region’s advantages well, as illustrated by their multiple locations. I’m sure they also don’t mind that Mexico, which is relatively friendly to UAS, rather than the FAA has authority over its Tijuana location. I had hoped to contact someone from 3D Robotics prior to this post, but will write a follow-up article if I can accomplish that.