When Stuart Rudolph wanted to build software to help companies manage fleets of drones, he found plenty of engineering talent in the Boston area. But when it came time to set up headquarters for his startup, SmartC2 Inc., Rudolph chose . . . North Dakota.
“They gave us some money — several hundred thousand,” Rudolph said. So even though SmartC2’s engineers are staying put, the company headquarters office is located 1,700 miles away, in Grand Forks.
SmartC2 is just one beneficiary of a relentless campaign by the state of North Dakota to dominate the commercial market for unmanned aerial vehicles. It is a major aviation center in its own right — the University of North Dakota hosts one of America’s leading aviation schools and the Grand Forks Air Force Base is home to some of the military’s top reconnaissance drone programs.
Meanwhile, Massachusetts can lay claim to being a leader in robotics, where the technology overlaps that of drones. The Massachusetts Institute of Technology, Worcester Polytechnic Institute, and the University of Massachusetts Lowell have top-tier academic programs and research operations, and the robotics industry claims more than 100 companies in the state.
Yet so far, the state government hasn’t sought to recruit drone companies with the same intensity or resources as North Dakota. If Massachusetts was offering financial incentives, Rudolph said, his company and others like it would set up shop in the state.
“One of the biggest issues is money for us, investment money,” Rudolph said. “That’s the missing link I see out there for companies like ourselves.”
The payoff could be big. The Association for Unmanned Vehicle Systems International, predicted in 2013 that the drone industry could generate $82 billion in economic benefits for the nation by 2025 and 100,000 jobs.
Kyle Wanner, director of the North Dakota Aeronautics Commission, is determined his state will get its share. “We want people to know that North Dakota is very friendly toward this industry,” Wanner said.
The state has spent $13 million on drone-related infrastructure projects, including a recently opened business and technology park adjacent to Grand Forks Air Force Base, a major launching site for military reconnaissance drones. North Dakota has also paid $34 million in incentives and subsidies to attract companies.
Other states are chasing the same business. Oklahoma created a strategic plan for the drone industry in 2012. In Oregon, the state has issued $324,000 in grants to drone-related businesses since 2014.
Massachusetts officials say they are exploring how to support the industry as part of a broader review. The Massachusetts Technology Collaborative, a state-funded agency that promotes high-tech industries, has commissioned a study of Massachusetts’ entire robotics industry, including land-based and seagoing robots as well as aerial vehicles.
“What we’ve tried to do is look at the robotic sector writ large, to try to understand what the state can do to enhance its competitiveness,” said Pat Larkin, director of the Innovation Institute at the Technology Collaborative. State officials will decide on their next moves once the study is completed this spring, Larkin said.
Massachusetts has already spent big money on seagoing robots. Local companies such as Hydroid LLC of Pocasset and Bluefin Robotics Corp. of Quincy dominate this market. To keep it that way, the collaborative awarded $5 million in 2014 to finance a research center for marine robotics at the Woods Hole Oceanographic Institution.
And in 2013 Massachusetts teamed up with New York State in a successful effort to establish one of six national sites approved by the Federal Aviation Administration for drone testing. North Dakota has another of the designated sites.
The Massachusetts Unmanned Aircraft Systems Test Center, at Joint Base Cape Cod, is conducting indoor tests on behalf of the Defense Advanced Research Projects Agency to develop drones that can automatically avoid obstacles while flying through buildings or down streets. The tests include three teams, one made up of engineers from Draper Laboratory and the Massachusetts Institute of Technology, the second from the University of Pennsylvania, and a third from Scientific Systems Company Inc. and AeroVironment Inc.
“We’ve given them a local location so they don’t have to travel to California or Texas or anyplace else to do this testing,” said H. Carter Hunt, Jr. executive director of the test center.
SmartC2 is one of those virtual companies that could be anywhere or everywhere. Although it’s incorporated in North Dakota, the boss, Rudolph, lives in Florida, while most of its engineering staff, about half a dozen people, are based in Massachusetts. North Dakota hosts a couple more engineers, along with a sales staff.
The company makes software that addresses an unsexy but vital problem — managing fleets of drones. As drones become everyday tools, companies and governments will deploy dozens or hundreds of them for routine tasks such as photographing real estate, inspecting power lines, or delivering packages. Each operation must ensure the machines reach their destinations while meeting government safety standards. Accurate recordkeeping for a large fleet could become a major hassle. The SmartC2 software, called VirtualAirBoss, provides a unified system for managing every aspect of fleet operations.
The VirtualAirBoss concept needn’t be limited to drones. As business companies deploy more ground-based mobile robots in warehouse and factory roles, SmartC2 could introduce a terrestrial version of the product. “The whole concept is about robotics,” said Rudolph. “There is room to expand what we do to other areas besides unmanned aircraft.”
Rudolph said that his company’s brains will remain in Massachusetts. Indeed, he predicted that if SmartC2 finds success in Grand Forks, it’ll end up hiring still more Bay State engineers. And if he could find sufficient funding, he’d bring the entire company to the Bay State.