HomeBriefings – Foreign Press Centers...City Spotlight: Innovation in the Drone Industry in Grand Forks, North Dakota

# 									City Spotlight: Innovation in the Drone Industry in Grand Forks, North Dakota							

FPC Briefing

Josh Teigen, Commerce Commissioner, State of North Dakota

Thursday, May 11, 2023, 1:00 p.m. ET

New York, NY

May 11, 2023

## 								Summary							

        -  In this on-the-record briefing, **Josh Teigen, Commerce Commissioner, State of North Dakota**, discussed his state’s role as the “Silicon Valley of Drone Innovation.”    

**NEW YORK FOREIGN PRESS CENTER, 799 UNITED NATIONS PLAZA, 10TH FLOOR**

**MODERATOR:** Good day, and welcome to this New York Foreign Press Center briefing. My name is Daphne Stavropoulos, and I’m today’s moderator. This is the latest briefing in the ongoing Foreign Press Centers City Spotlight Series, providing our members with access to state and local leaders throughout the United States. Each briefing sheds a spotlight on a locality on the front lines of some of our biggest international challenges and opportunities.

Today it’s a pleasure to introduce Josh Teigen, Commissioner for North Dakota’s Department of Commerce, who will speak about his state’s role as the “Silicon Valley of Drone Innovation.” We’ll get an update on the uncrewed aerial systems industry, and the state’s ambitious talent attraction and workforce initiatives to support this growing sector of the economy.

This briefing is on the record, and the views expressed by non-federal government guests are their own, and do not necessarily reflect the views of the U.S. Government. We ask that if you publish a story from today’s briefing, you’ll share it with us.

Following our commissioner’s presentation, I’ll open the floor for questions. If you have a question, go to the participant field and raise your virtual hand and wait for me to call on you. And when called on, please enable both your audio and your video, and introduce yourself and your outlet.

And with that, it’s a pleasure to turn it over to Commissioner Teigen. Thanks for joining us.

**MR TEIGEN:** Well, thanks for having me, everyone. And it’s great to be here and talk a little bit about what we have going on in North Dakota, especially when it comes to drone innovation. For those of you that may not know a lot about North Dakota, we’re a small state, heavily focused on energy and agriculture, which makes up about 70 percent of our economy. So as a state that is made up primarily of commodity markets, that leaves us highly susceptible to commodity price swings in the market.

So with that, about 10 years ago the legislature and members of our executive branch decided that North Dakota was going to be the frontier for all unmanned systems innovation in the United States. And so with that, we’ve invested over $100 million, now approaching $150 million, in developing a unmanned aerial systems network. And so what that means is in the U.S. there are seven federally designated test sites for the commercialization of UAS

technology. North Dakota is home to one of those – actually the largest of those test sites. In addition to that, the first kind of frontier of UAS technology is flying beyond visual line of sight. There’s a lot of people that are doing line-of-sight UAS development, but the first to be able to fly beyond visual line of sight with full FAA exemption is North Dakota. And a lot of the reasoning for that is because of the network that we’ve been able to build.

So essentially conventional aviation networks don’t work for unmanned systems. So what North Dakota did, is we’re essentially going to build the – our very own network for drones to operate within. So this network will communicate with FAA air traffic control systems, as well as with ground operation systems, and integrate seamlessly so we can conduct the first beyond-visual-line-of-sight mission.

So that system is in place today. We also have the first UAS-specific focused business park in the entire nation. So all of the ground operations that need to go into air autonomy are something that a lot of people forget. So we have the air autonomy network, we also have the ground autonomy infrastructure to enable that, and then we’re one of the federally designated test sites.

So a recent example of how we’ve used this technology would be in recent flooding. So in the spring, a lot of times the eastern part of our state experiences major flooding. And we were able for the first time to use your beyond-visual-line-of-sight network to actually conduct drone missions to fly, observe funding – or flooding, figure out where certain problem areas would be, coordinate rescue and infrastructure needs. So there’s a public safety component and emergency services component of it, but in addition there’s huge industry benefits as well. So as a state that sits within the top three of oil and gas production for the entire United States, a lot of pipeline infrastructure, it’s incredibly costly to inspect pipelines manually with someone in a vehicle, someone in a helicopter, someone in an airplane. Far more cost-advantageous to have someone fly a drone beyond visual line of sight with hyperspectral camera imaging to inspect pipelines.

The same could be said for our agriculture sector, where we’re the number one producer of 14 different crop varieties. And being able to fly fields to detect different crop diseases, to detect moisture levels, or things so – we can bring autonomy to farming and agriculture, which increases profitability and productivity, but then also helps reduce costs. Because rather than spraying an entire field with fertilizer, we can target it to the specific areas that are needed. We can do that all with informed imaging – or images that we’re getting from these drones.

So those three kind of pillars of this industry work really well, where we see it not as the next industry vertical of our state, but actually a horizontal industry that touches things like energy, agriculture, transportation, and logistics. And even some of the infrastructure that we’ve invested in and the things that we’ve done, those investments can be applied to the ground level for ground autonomy.

So one of the first frontiers that we’ve explored there is actually with our department of transportation. So our department of transportation has thousands of miles of interstate and

highway, and those ditches need to be mowed. Well, they can now use autonomous lawnmowers to mow those areas using the network that we designed for air autonomy. And that network as well can be applied to factory automation as well. You can move things through a production process while interacting with a network that may be tied into an entire logistics hub as well. So those are a few use cases of how we’re utilizing this.

And I talked a lot about infrastructure and the investments we’ve made there. And our thesis on this is if we build the infrastructure, that means the commercialization about those technologies that need that infrastructure will also take place here. If you want to commercialize drone technology, you need to fly beyond visual line of sight. The only place you can do that is in North Dakota. So we’ve kind of backed ourself into this IP commercialization via these investments in all of the different infrastructure components that I’ve mentioned.

So maybe I’ll pause there if anyone has questions on any of the pieces that I’ve just kind of elaborated on.

**MODERATOR:** Absolutely. Thank you so much for your opening remarks. We do have a first question and it comes from Pearl Matibe. Pearl, can you go ahead and introduce your outlet, and if you wish, enable your video so we can see you as well?

**QUESTION:** Daphne, thank you so much. Good afternoon. And Josh, thank you so much for being available and your opening remarks. I appreciate those because – I mean, I’m not a drone expert, but as Daphne mentioned, my outlet is defenceWeb out of South Africa, one of the largest defense outlets. And so aerospace kind of intersects there, and that is my focus.

So it’s interesting, right, what you mentioned about North Dakota and some very interesting developments over the last years and the future projections. I appreciate those. Josh, if I may, I know you’re talking about commercialization in particular, but perhaps help me – let me borrow your understanding about drone technology and ask you something that may sound like political questions, but – even though you may not be an expert in that, but maybe you can sort of help me understand thinkings behind unmanned aerial vehicles.

So one thing I’d like to kind of think in this basic industry: Wwhy do you think that drones are so essential technology to, say, combat aerial vehicles? Once this thing becomes commercialized, yes, it’ll be available to agriculture and other things, but there are going to be a lot of people who are in the defense sector that may also be interested in this. And kind of bridging off of that, how competitive do you foresee the acceleration of this technology out of North Dakota becoming competitive with the people doing the same thing you are doing but they’re not in America, right? They might be in China or Russia – in fact, let’s say – just say they might be – in Türkiye, China, Iran. So to what extent is what you’re doing in North Dakota competitive enough for these other outside actors that are already exporting unmanned aerial vehicles to Africa? I know that they’re exporting for combat, but I want to understand competitiveness here in the future moving forward. Thanks, Josh.

And I may need to leave, but I just wanted to throw in my questions there.

**MR TEIGEN:** Yeah, well thank you, Pearl. I appreciate the question. And we’ve recently started doing a lot of business with South African companies as well, so great to hear from you.

To address the first part of the question, when it comes to, I guess, how these things will be used from a national defense standpoint, I mentioned that ground autonomy aviation business park – actually two of the anchored tenets there are Northrup Grumman and General Atomics. Northrup Grumman is repurposing these Global Hawk drones that were used by the Air Force and rather than looking down and using them for surveillance purposes, they’re actually converting them to look up. And they can fly and look for ICBMs and other things to identify missiles from a national defense standpoint.

So I think as we look at national defense at a global scale, we know that troops on the ground is becoming less and less of a frontier and wars are being fought with – say it’s cyber security, say it’s drones, say it’s other things where the impact to human life is minimized, and I think that is a good thing for everyone. It’s more data-driven than human casualty-driven, and I think that’s positive for all. So we certainly see tons of national defense applications for the drone infrastructure that we’re building, which is why we have two large Air Force bases, we have this business park with major defense contractors and things that are utilizing our network for that purpose.

When it comes to kind of the global competitive landscape, I think there’s a – perhaps a global thought around not purchasing products that are maybe made in Japan or commercialized – or not Japan, China, I’m sorry – commercialized in China because of some of the intellectual property concerns. And so that’s where we see commercializing, whether it’s software, hardware, whatever it may be – doing that on U.S. soil is a huge competitive advantage for us.

And actually, I was thinking of Japan because Japan’s one of our strategic partners in kind of the global national defense space. A lot of Japan’s national security comes from the Minot Air Force Base in North Dakota, which is home to a lot of these autonomous missions. And so if the technology is commercialized here, we can apply that across the world, and it has the – I would say maybe the strictest air requirements with our FAA and what they’ll allow us to do and not to, especially over people. So if we can solve for that here, we can apply it just about anywhere. And so that’s where I think we fit kind of in that global competitive landscape of things.

**QUESTION:** Thank you so much.

**MODERATOR:** Thanks, Pearl. If there are other participants who wish to ask a question, please raise your virtual hand or type your question in the chat.

Commissioner, you had – moving to a different application of drones, I wonder if you could elaborate on the use of drones for health, human services, and public safety.

**MR TEIGEN:** Yeah, so I touched a little bit on the public safety component with our flooding story, but we also see, being a very rural state, that health and human services is a huge

frontier. So for example, if someone’s living in a rural community, their access to health care is vastly different than someone that lives in an urban setting. So that could be things like getting to doctor’s appointments, but it could also be things as simple as, like, drug delivery for pharmaceuticals and such.

And so if we can perhaps put a drone on top of a rail car, and that rail car as it – it crosses the United States and goes through rural communities, if that drone could be going out and delivering, say, medications, vaccines, other health care-related items to rural communities where this isn’t readily available at the time, that’s a huge quality-of-life impact to our state, and it’s also something where people can choose where they want to live first and they don’t have to compromise on other things like access to health care. So we see this being almost a disproportional benefit to where it may benefit rural communities more than it benefits urban communities initially, and so I think that’s something that’s actually really exciting for us.

**MODERATOR:** I’ll take moderator’s prerogative and ask another question. You mentioned some of the state-level investment that has gone into the industry, but maybe you could elaborate on that. And if there is opportunities for foreign direct investment, maybe you could talk about that a little bit too.

**MR TEIGEN:** Yeah. So there’s certainly a ton of room for foreign direct investment. To date, our legislature just approved an additional $39 million worth of investment into our UAS technologies here, and so we’re very excited about that. That brings the total number over $100 million since we first embarked on this.

When it comes to foreign direct investment, the – our – one of our partners that’s built out this network that I’ve talked about, that’s a French company called Thales, and so there’s a ton of opportunity for us to work with international companies that are looking to commercialize technology, looking to kind of push the envelope and do new things, do that in North Dakota versus do it elsewhere in the world where there may not be the infrastructure that exists. So we’re actively seeking foreign direct investment in this space and would be happy to kind of expand beyond just the defense contracting and with Thales that we’ve been working with so far.

**MODERATOR:** Thank you. It looks like we have a question in the chat. The question comes from Manik Mehta, who is an internationally syndicated journalist. The question is: “How open are you to transferring technology for production at an overseas site such as India, which is expanding its drone base for multiple applications? India is a non-NATO country, but it is a friendly country which is designated as a strategic partner of the United States. Would you also be interested to invest and set up your production facility in India, which offers a large reservoir of qualified human resources and market demand?”

**MR TEIGEN:** Yeah, I think when it comes to transfer of technology or where we set up manufacturing – things like that – the – from a manufacturing standpoint, that’s really up to the private companies that are making that investment. The state itself, we are building the infrastructure and the network, and there’s ways that we can potentially monetize that. But

when it comes to the actual company level, those are decisions that they make independent of the state.

And in terms of tech transfer as well, that’s up to the individual company level. So if there was an Indian company that wanted to come commercialize in North Dakota and take that IP back, I think that – there’s nothing that we would have to say against that. All our role as a government entity is, is to provide the infrastructure for this commercialization to take place, and there’s a lot of public good that comes from that with some of the use cases that I’ve mentioned.

**MODERATOR:** Thank you so much. The next question comes in from Oyiza Abada from Africa-Related. She is asking, “How is this new technology affecting actual human jobs, as some of the examples you mentioned seemed to be replacing jobs?”

**MR TEIGEN:** Yeah, so this is a great question, and I’m glad it came up, because when we talked about unmanned aerial systems, a lot of times people think we’re replacing all of these jobs. The term in the industry is actually moving away from unmanned aerial systems to uncrewed, and that means there’s not a crew physically in the aircraft, but that doesn’t mean that it’s unmanned.

So actually what we’ve found is with an autonomous operation like this, it may require more people than a manned operation. Now, those people are on the ground flying the drone or monitoring or working through the safety requirements and things like that, so there are still tons of people involved. And I think it’s usually about three to one; for every one person that used to do a crewed mission, now there’s three people to an uncrewed mission. So we’re actually creating about three times as many jobs as we’re replacing, and it’s really just a factor of safety. That’s the big improvement, is instead of putting lives at risk in the air or something, they’re on the ground. And it actually takes more people to pull off that mission than it would in a crewed setting.

**MODERATOR:** Thanks for that question. That was an interesting question. I don’t see any more hands raised or questions in the chat, so could you maybe – unless we have final questions, maybe just provide some closing statements, and maybe just talk about the – what the future holds for this industry?

**MR TEIGEN:** Yeah, absolutely. And so I think when we look at the future, the biggest thing is we’ve, I think, proven a model here within the state, but the next frontier is how do we conduct missions that are across state borders. How does North Dakota conduct a mission that maybe goes from North Dakota into Montana or into Minnesota? And then how do we do cross-border missions as well? So how does North Dakota do a mission where we lead it, but it maybe goes into Canada? And if we can do that, how do we then run missions from North Dakota and do them across the world? And so I think that’s really the next frontier of things, is globalizing what we’re doing here within our borders.

**MODERATOR:** Well, I appreciate your time today and for all the journalists who joined us. This briefing was on the record, and we will provide a transcript to all that attended as well as post it on our website afterwards. Thank you again, Commissioner, for joining us, and good day.

**MR TEIGEN:** Thanks, everyone.

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