How a Nordic country has become a hotspot for defence technology live from the UK.

This is the Marketplace Morning Report from the BBC World Service.

I'm Sarah Rogers. Good morning.

First to Finland and its plans to boost defence spending by $3.2 billion.

The government says it wants to raise expenditure from 2.41% to 3% of its economic output over the next four years, citing security worries.

The Nordic country has seen a boom in its defence tech industry since the start of the war in Ukraine.

The BBC's Madi Savage reports from Helsinki.

That's the sound of a J-16 fighter jet flying above a mountain range.

But it's not a real plane, it's a pilot training simulator developed by Vario,

a big name among the hundreds of companies in Finland that help countries protect themselves from war.

The firm CEO is Timor Toikinen.

The war in Ukraine just kind of put everything on steroids.

You know, things started happening a lot fast.

And I guess we're all aware, at least here in this part of Europe, of their new reality,

which is that the world is a lot more insecure than it used to be.

Finland, with a population of just 5 million, has 368 defence tech companies, according to

research for Tessi, a state-funded venture capital company.

40% are start-ups and scale-ups, with many growing at rates of 30 to 40%, especially if their

tools can also be used in other industries.

Helsinki is now among the top five cities in Europe for defence tech investment.

And Vario's CEO says he's expecting the scene to keep expanding due to the current tensions between Europe and the US.

We are today supplying more than 80 synthetic training programs across NATO, many of them in Europe.

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