Editor's Note

As a strategic emerging industry and future-oriented sector, the low-altitude economy has risen to become a key focus of national economic policy. Data shows that in 2023, China’s low-altitude economy exceeded 500 billion yuan in scale, and is expected to reach 2 trillion yuan by 2030.

As we approach the midpoint of 2024, what is the current state of the low-altitude economy’s industrial ecosystem, and how are various regions planning their development? What strategies can local governments adopt to secure a foothold in the “low-altitude economy”?

The "Low-Altitude Economy" Industrial Ecosystem

The low-altitude economy is a quintessential example of new-quality productive forces. It refers to a comprehensive economic model centered on civil manned and unmanned aircraft, driven by multi-scenario low-altitude flight activities—including passenger transport, cargo transport, and other operations—that radiate and drive the integrated development of related sectors.

It is characterized by a broad scope of influence, a long industrial chain, and strong growth and driving potential, offering vast opportunities for stimulating effective investment, creating consumer demand, and enhancing innovation capabilities.

Based on industrial classification, the low-altitude economy can be divided into four major sectors:

● Equipment Manufacturing: Primarily comprising manufacturers of various aircraft, as well as suppliers of components and core equipment.

This includes aircraft, core components, payload equipment, and lightweight materials.

● Flight Applications: The core component of the low-altitude economy, serving as a driving force for the entire sector.

This includes production operations, public services, aviation-related consumer services, and military and security applications.

● Low-altitude support services: Industries providing support services for low-altitude flight and airspace safety.

This includes inspection and testing services, low-altitude airspace control systems, unmanned aircraft flight information systems, and airworthiness certification.

● Infrastructure: Infrastructure development supporting the low-altitude economy.

This includes network infrastructure, data infrastructure, regulatory infrastructure, ground infrastructure, and energy infrastructure.

▲ Low-Altitude Economy Industrial Ecosystem Map

The development of the low-altitude economy’s industrial ecosystem primarily involves three key sectors: the government sector, the corporate sector, and the public sector.

● The government sector, which primarily involves regulation, administrative management, and the development of foundational support systems, serves as the “director” of the low-altitude economy’s development.

● The corporate sector primarily involves manufacturing, software and information technology, the development of certain foundational support systems, and the construction of integrated industrial applications; it serves as the “builder” upon which the low-altitude economy relies.

● The public sector primarily focuses on innovative applications and serves as a vital “consumer base.”

For a comprehensive overview of the specific industrial sectors and key segments within these three spheres, please refer to the Low-Altitude Economy Industrial Ecosystem Map compiled by the GuChuan Industrial Research Institute; details will not be elaborated upon here.

Three Major Industrial Chain Maps: Delving into the Core

If understanding the full picture of the industrial ecosystem is the starting point for grasping the general direction of the new industry,

then studying the full low-altitude economy industrial chain map is like finding the “compass” for the new course and targeting specific market segments.

▲Panoramic View of the Low-Altitude Economy Industrial Chain

According to the Low-Altitude Economy Industrial Chain Panorama Map by the GuChuan Industrial Research Institute, we can clearly see that the extensive low-altitude economy industrial chain encompasses low-altitude equipment manufacturing, infrastructure construction, operation, and maintenance, as well as low-altitude service industries that permeate various sectors such as agriculture, logistics, defense, and transportation.

With such a vast and thriving array of sub-sectors within this long industrial chain, how can we precisely focus on the core industries?

We must start with the practical applications, look beyond the surface, and grasp the “essence of the value chain”!

At present, the low-altitude economy relies primarily on drones, with traditional general aviation aircraft serving as a supplement;

In the future, eVTOLs (electric vertical takeoff and landing aircraft) will become the primary platform, with various general aviation equipment developing in tandem across different application areas.

Next, we will further analyze this by examining the industrial chain maps of these two primary platforms.

Current State of the Drone Industry

▲ Overview of the Drone Industry Chain

Referring to the comprehensive UAV industry chain map compiled by the GuChuan Industry Research Institute, we can clearly identify the specific industries involved in the upstream, midstream, and downstream sectors.

Upstream: Primarily design and components (including raw materials, batteries, flight control systems, motors, etc.);

Midstream: Primarily UAV integration and manufacturing (including flight platforms, mission payloads, ground systems, and complete UAV units);

Downstream: Primarily operations and various application scenarios (including military, aerial photography, agricultural plant protection, etc.).

Current Overview of China’s Drone Market: In 2023, the scale of China’s civilian drone industry reached 117.43 billion yuan, firmly ranking first globally. It is projected to exceed 200 billion yuan by 2025, with a compound annual growth rate of 30.5% (Source: Galaxy Securities Research Institute).

Among these, industrial drones account for approximately 60% of the civilian market.

Globally, the consumer drone market is essentially monopolized by DJI, which holds over 70% of the market share.

According to Drone Industry Insights, DJI held over 70% of the U.S. consumer drone market in 2023.

DJI, Daotong Technology, and XAG collectively hold over 80% of the global market share.
As of the end of 2023, China had 1.267 million registered civilian drones, with a total flight time of 23.11 million hours for the year. The industry comprises nearly 20,000 drone companies, making China the world leader in market share.

Current Status of the eVTOL Industry

▲Panoramic View of the eVTOL Industry Chain

At present, China’s eVTOL sector is in the early stages of industrialization. Most companies’ products are experimental models, with no mass production yet underway, and the supply chain infrastructure has not yet been established.

In the future, eVTOL technology will follow three main development paths: multi-rotor, hybrid-wing (lift + cruise), and vector thrust (tiltrotor, tilting ducted fan).

Among these, multi-rotor technology is the most mature and will be the first to be adopted. It was originally designed for short-distance applications such as urban commuting, sightseeing, and agricultural and forestry crop protection.

Its technical advantages include: simple mechanical structure, relatively low difficulty in design, production, and manufacturing, a shorter airworthiness certification process, and relatively lower costs.

Hybrid-wing (lift + cruise) technology is still in the experimental stage and is primarily intended for applications such as intercity commuting and firefighting and rescue operations, which require moderate range and high safety.

Its technical advantages include high cruising efficiency, as well as assured range and safety.

Tiltrotor aircraft are currently still in the experimental stage and are primarily suited for long-distance commuting. Their advantages include low empty weight, high motor efficiency, high airspeed, and long range.

Tilting-rotor ducted fans are currently undergoing a lengthy feasibility verification process and are primarily designed for long-distance commuting.

Current Status and Development Models of Industrial Parks

▲ Distribution of Core Industrial Clusters

As shown in the core industry distribution map compiled by the GuChuan Industrial Research Institute, current low-altitude economy-related parks are primarily focused on the drone industry. In 2024, some regions began pioneering efforts to establish low-altitude economy industrial parks.

Notably, Sichuan, Hainan, Hunan, Jiangxi, and Anhui have become the first batch of provinces nationwide to pilot low-altitude airspace management reforms.

Representative Parks: Jinshan District East China Drone Base, Yangtze River Delta Low-Altitude Economy Hongqiao Industrial Park, Wuxi Dingshu Low-Altitude Economy Industrial Park, Jiangxi Gongqingcheng Low-Altitude Economy Industrial Park, etc. Here, we will focus on analyzing the development experiences of Shenzhen and Hunan.

Shenzhen’s Low-Altitude Economy Development Model

Shenzhen is hailed as the “Drone Capital,” boasting a strong industrial foundation and relatively comprehensive supporting infrastructure. It has attracted leading drone industry enterprises such as DJI, Fengyi Technology, and Tianying Equipment.

Shenzhen’s consumer-grade drones account for 70% of the global market share, while its industrial-grade drones represent over 50% of the global market.

According to the "Special Report on the Low-Altitude Economy" by the Tanigawa Industrial Research Institute, Shenzhen’s low-altitude economy development is characterized by market-driven growth and exploratory applications.

Specific experiences can be summarized as follows:

1. A complete industrial chain, with manufacturing leading the way.

Shenzhen’s concentration of the electronics and information technology industry has fostered a comprehensive supply chain system, laying a solid foundation for the incubation and development of the drone manufacturing sector.

2. Shenzhen’s domestic IT innovation sector is robust, and low-altitude application services are deeply integrated with the manufacturing industry.

Relying on leading enterprises, the city is actively exploring specific applications in logistics and delivery as well as passenger flights within the low-altitude economy.

3. Prioritizing the development of foundational support systems

Shenzhen has large-scale investment plans, with government and enterprises collaborating to jointly build infrastructure and platforms.

4. Seizing Development Opportunities and Pioneering Industry Subsidy Policies

Hunan Province’s Low-Altitude Economy Development Model

As a pilot province for low-altitude reform, Hunan features stronger government leadership. It focuses on mid- and upstream manufacturing segments by establishing specialized industrial parks to form low-altitude economy manufacturing clusters, while downstream applications place greater emphasis on the traditional general aviation industry.

The development of Hunan’s low-altitude economy is characterized by government leadership and a manufacturing-first approach.

Specific experiences can be summarized as follows:

1. Responding to airspace reform through policy and establishing local standards.

The management of low-altitude airspace has shifted from separate military and civil aviation oversight to a collaborative three-party management system involving the military, local governments, and the private sector, laying the groundwork for low-altitude economic development. Standards for drones have been established across multiple dimensions—including facilities, equipment, service requirements, and information management—to enhance the standardization of institutional management.

2. Implementing measures to attract investment projects and build industrial clusters.

The Hunan provincial government, as the primary driving force, attracts capital and investment projects to build industrial cooperation platforms. Leveraging local civil aviation enterprises in Zhuzhou, it accelerates the independent R&D and manufacturing of civil aviation products to establish an integrated industrial system covering the entire value chain.

Strategic Recommendations for Developing the Low-Altitude Economy

First, assess your own capabilities to determine whether you possess the prerequisites for developing the low-altitude economy.

When breaking this down into implementation phases, assessments can be made from two main perspectives: the manufacturing side and the application side.

On the manufacturing side, we need to ask ourselves four questions.

1. Does our region have a complete industrial chain? Do we have a foundation in the drone and traditional general aviation industries?

2. Does our region have industrial chain connectivity, such as upstream and downstream industries related to eTVOL?

3. Are our resource endowments—specifically our research and development capabilities and capital reserves—sufficient?

4. Does our region have the necessary conditions for test flights?

On the application side, we must also answer four questions.

1. Are low-altitude economy application scenarios linked to our region’s existing distinctive industries?

2. How open is our airspace? Has this been planned in advance?

3. Do we have consistent policy support?

4. What is our economic level, and can it sustain the long-term development of the low-altitude economy?

Step 2: Develop a targeted, coordinated plan. After clarifying objectives, learn to formulate scientific industrial policies to support the development of the low-altitude economy.

Compared to traditional industrial support policies—such as tax incentives, residency policies, and business development—policies for the low-altitude economy require focused efforts in building foundational support systems, certification, market cultivation, and talent recruitment and development.

● Building the foundational support system

1. In addition to scientific research and innovation, as well as testing and inspection platforms, attention must be paid to the development of service platforms, such as low-altitude simulation and verification, flight services, and test flight platforms.

2. Hardware infrastructure is particularly critical; low-altitude information infrastructure, ground support facilities, and infrastructure related to all-domain unmanned systems all require focused attention and development.

● Certification and Incentives

In addition to product and industrial certification, airworthiness certification for corporate products is equally important.

If conditions permit, the government may provide incentives and subsidies to enterprises upon the successful certification of their products (TC, PC, AC).

● Talent Recruitment and Development

In addition to recruiting talent for research and manufacturing, professionals in application fields—such as drone pilots, general aviation pilots, and drone swarm operators—must also be recruited and nurtured over the long term.

● Market Development

In the early stages of industry development, the government creating procurement demand is one of the foundations for supporting industrial growth.

At the same time, the government should appropriately encourage downstream enterprises that have obtained operating licenses to explore application scenarios by providing relevant companies with appropriate financial incentives and subsidies.

END

Report Author | Wang Pengxiao, Guichuan Industrial Research Institute

Graphic Editor | Ramy, Brand Team, GuChuan United