As the wars that have fueled the explosive growth in the use of unmanned systems wind down, the outlook for industry is beginning to look quite different, depending on where you stand in the market.

For small unmanned aircraft systems (SUAS), the arena is shifting from rapid, high-volume procurement to top-up buys, export sales, sustainment and upgrades, but demand continues to look robust.

For manufacturers interested in large UAS, the picture that emerged here at the industry's biggest showcase—the Association of Unmanned Vehicle Systems International's Unmanned Systems North America 2012—was less clear.

As the attention of military planners begins to shift away from irregular warfare and counterinsurgency, the services operating large UAS are taking time out to look at what would be required to fight a near-peer enemy.

The outlook points to:

•A U.S. Army moving to institutionalize the many UAS investments made over the past decade.

•A U.S. Air Force rethinking its plans to replace the workhorse Predator/Reaper fleet.

•A U.S. Navy, late to the unmanned game, that could be first to step to the next generation.

Four years ago, the Air Force began an “aggressive campaign” to launch the MQ-X program to replace its General Atomics Aeronautical Systems MQ-1 Predators and MQ-9 Reapers, says Maj. Gen. James Poss, Air Force assistant deputy chief of staff for intelligence, surveillance and reconnaissance. Now called the Next Generation RPA (for remotely piloted aircraft), the program has slipped into the next decade. “We recognize the need to operate in denied airspace and to have a capability available by the early to mid-2020s,” says Poss. “We are watching with great interest what the Navy is doing, because we think we have a common problem.”

While the services believe that today's UAS, designed to operate in permissive airspace, will not be survivable in combat against an enemy with sophisticated air defenses, they are not sure how to proceed. The Navy is first to tackle the problem with its plans to field the Unmanned Carrier-Launched Airborne Surveillance and Strike System (Uclass) by 2020.

“The Navy is struggling with how to execute [in denied airspace],” says Poss. “Do you go low-observable, do you swarm, or do you go with something cheap and cheery and attritable? We're not sure we know.” Meanwhile, current-generation UAS, if equipped with the electronic countermeasures of a Block 50 F-16, “are surprisingly survivable.”

“We want to stay well aligned with the Navy” as it proceeds with Uclass, says Poss. “And we are genuinely open to suggestions from industry on the best way to go.”

But a problem for industry is the lack of investment in technology development to increase the capability and improve the efficiency of next-generation UAS. “More investment needs to be made to make the step to the next generation of utility,” says Bob Ruszkowski, senior manager for market initiatives in the strategic studies group at Lockheed Martin Aeronautics. “The time to invest is now,” he adds.

“The UAS we use today with relative impunity in irregular warfare will have less utility in a major theater conflict because of their survivability,” he says. Also, the manpower required to operate today's UAS, the effort needed to analyze all the data they collect, and closed architectures that make them hard to upgrade are shortcomings to that need be addressed.

In addition to being stealthy, a next-generation UAS should be capable of “full-spectrum operations and synergistic manned/unmanned missions, with an open architecture and streamlined infrastructure,” says Ruszkowski. Technologies need to be developed in the areas of vehicle, communication and information autonomy; persistence and reliability; signature management; and open architectures. “We can use some of the technologies developed on our current systems, in intelligence analysis, for example.”

Lockheed Martin has established a new business line within its Aeronautics sector to marshal company resources to develop “advanced ISR [intelligence, surveillance and reconnaissance] products, services and technologies,” says Ruszkowski, and to pursue “significant opportunities” such as Uclass, for which it is offering the Sea Ghost UAS. Boeing, General Atomics Aeronautical Systems and Northrop Grumman also are continuing to work on Uclass concept studies under Navy contract.

The Army has similar concerns about the survivability of its unmanned aircraft as it begins to look toward future conflicts, but its near-term focus is on the cost of operating a massive UAS fleet built up over two wars. “We are looking very deliberately at reducing cost of ownership,” says Richard Kretzschmar, Army deputy program manager for UAS.

Although the war in Afghanistan is winding down, the Army is planning to increase, not reduce, its use of UAS by ensuring that more units have their own systems. The plan for procurement and deployment of the medium-sized General Atomics MQ-1C Gray Eagle is now to field a company in every division. “That's a significant increase,” he says.

There are also plans to push SUAS down to the squad level and to give small units the same ability to overmatch any enemy that the Army considers it has at the platoon and division levels. “At the squad level we are not as dominant. We want to give them the situational awareness and get them out of a fair fight,” says Kretzschmar.

“The Army is looking at making the squad more engaged,” says Roy Minson, senior vice present and general manager of AeroVironment's unmanned aircraft systems business, which supplies most of the Pentagon's small UAS. “They see the squad as a strategic force and want overwhelming power at the squad level. So we continue to see them filling out their requirements and incorporating the latest capabilities.”

At the same time, the Army has almost completed its planned procurement of SUAS and is shifting its focus to sustainment and upgrades. After buying 6,000 RQ-11 Ravens and larger RQ-20 Pumas from AeroVironment, “we are close to fielding our objective procurement—about the 95% mark,” says Maj. Jeff Poquette, SUAS program manager.

At this late stage, the Army plans to open its SUAS procurement to competition, awarding indefinite-delivery/indefinite-quantity (ID/IQ) contracts to multiple vendors, then competing individual task orders for top-up buys, services, logistics and upgrades. The ID/IQ contracts will cover the medium-endurance Raven-class and long-endurance Puma-class SUAS, but be open to other manufacturers of airframes and payloads. There will also be some flexibility to purchase other systems, such as a vertical-takeoff-and landing (VTOL) SUAS, says Poquette.

The Army's plans helped fuel an explosion of small-UAS activity at the AUVSI show, which Minson eyes with skepticism. “Who is buying these things? We are supplying the majority of everything.” Although AeroVironment will face competition going forward, he is confident of continued domestic and international demand for Raven and Puma, and the company is introducing new SUAS, including the all-environment Wasp AE, lethal Switchblade and VTOL quadrotor Shrike.

“When we first started doing SUAS, not much thought was given to how many should be in the force,” says Minson. “We see the need for another class of aircraft, the Shrike VTOL.” And more products are in development. “We will move to smaller UAS, and also go up to longer endurance,” he says. But AeroVironment will stick to the lower end of the market, for now. “We see hand-launch as key,” he says.

One reason for the growing popularity of SUAS is the ongoing dramatic reductions in payload size, which are significantly increasing the capabilities of small platforms. “Five years ago everyone was building an aircraft in their garage and bringing it to the show. But the platforms are settling down,” says Steve Morrow, president and CEO of small-UAS manufacturer Insitu.

“Now everybody is building a payload. . . . And Moore's Law applies to payloads. It's fast-moving and exciting—it's eyewatering,” he says. “Insitu is looking at 75-100 potential payloads, some proposed by customers, suppliers and technologists, and some we ourselves have conceived. Future capabilities will be less about the truck and more about the payload.”

Poquette says future roles the Army is eyeing for SUAS include chemical/biological and radiation detection, signals intelligence, communications relay and base defense. Longer term, in 5-10 years, he sees the need emerging for smaller, stealthier SUAS with longer endurance and faster launch. “We want something you can launch out of a pocket and control with a screen on your arm.”