Maddy Savage

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's CEO is Timo Toikkonen.

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.

Finland borders Russia, and the government here spent a greater proportion of its budget on defence than many other European countries, even before the war in Ukraine. There's also military conscription here.

Many experts believe these factors have encouraged Finnish entrepreneurs and investors to focus on defence tech rather than other fast-growing industries like energy and financial technologies.

That's Nicholas Nelson, a US defence tech investor based in Europe.

Another factor behind Finland's defence tech success is its strong start-up ecosystem. This is Maria01, a former hospital that's been transformed into the largest start-up campus in the Nordics, a place where entrepreneurs, founders and others in the tech scene can collaborate. I'm meeting Kyrsi Kokko from Business Finland, a Finnish government agency that promotes investment and innovation.

She's the head of a $130 million programme supporting defence and resilience companies.

She says the sector is facing challenges, though, like recruiting the global talent needed to help build defence tech companies in Finland. Its salaries and weather can't usually compete with tech hubs like Silicon Valley or even London, although she says it's still attractive due to its flat hierarchies and culture of innovation.

Another issue is one affecting all defence tech businesses eyeing European expansion, a fragmented market. Here's Nicholas Nelson again.

Business Finland says it is helping to support start-ups with internationalisation strategies. And in the last few weeks, the EU's promised to simplify regulations and encourage better cooperation between member states. Another sign of geopolitical tensions fuelling growth in this booming sector.