diff --git a/.changeset/sweet-cameras-kick.md b/.changeset/sweet-cameras-kick.md
new file mode 100644
index 0000000000..c6b1e03872
--- /dev/null
+++ b/.changeset/sweet-cameras-kick.md
@@ -0,0 +1,5 @@
+---
+'@backstage/create-app': patch
+---
+
+Updated included Dockerfile to include `g++`. Also updated the comments to note that some of the dependecies are also needed by isolated-vm
diff --git a/docs/deployment/docker.md b/docs/deployment/docker.md
index f96204b413..33afccc5b4 100644
--- a/docs/deployment/docker.md
+++ b/docs/deployment/docker.md
@@ -37,7 +37,7 @@ The required steps in the host build are to install dependencies with
 `yarn install`, generate type definitions using `yarn tsc`, and build the backend
 package with `yarn build:backend`.
 
-In a CI workflow it might look something like this:
+In a CI workflow it might look something like this, from the root:
 
 ```bash
 yarn install --frozen-lockfile
@@ -47,7 +47,7 @@ yarn tsc
 
 # Build the backend, which bundles it all up into the packages/backend/dist folder.
 # The configuration files here should match the one you use inside the Dockerfile below.
-yarn build:backend --config app-config.yaml
+yarn build:backend --config ../../app-config.yaml
 ```
 
 Once the host build is complete, we are ready to build our image. The following
@@ -56,12 +56,13 @@ Once the host build is complete, we are ready to build our image. The following
 ```Dockerfile
 FROM node:16-bullseye-slim
 
-# Install sqlite3 dependencies. You can skip this if you don't use sqlite3 in the image,
+# Install sqlite3 and isolated-vm dependencies.
+# You can remove libsqlite3-dev if you don't use sqlite3 in the image,
 # in which case you should also move better-sqlite3 to "devDependencies" in package.json.
 RUN --mount=type=cache,target=/var/cache/apt,sharing=locked \
     --mount=type=cache,target=/var/lib/apt,sharing=locked \
     apt-get update && \
-    apt-get install -y --no-install-recommends libsqlite3-dev python3 build-essential && \
+    apt-get install -y --no-install-recommends libsqlite3-dev python3 g++ build-essential && \
     yarn config set python /usr/bin/python3
 
 # From here on we use the least-privileged `node` user to run the backend.
@@ -169,11 +170,11 @@ RUN find packages \! -name "package.json" -mindepth 2 -maxdepth 2 -exec rm -rf {
 # Stage 2 - Install dependencies and build packages
 FROM node:16-bullseye-slim AS build
 
-# install sqlite3 dependencies
+# Install sqlite3 and isolated-vm dependencies, if you don't use sqlite you can remove libsqlite3-dev
 RUN --mount=type=cache,target=/var/cache/apt,sharing=locked \
     --mount=type=cache,target=/var/lib/apt,sharing=locked \
     apt-get update && \
-    apt-get install -y --no-install-recommends libsqlite3-dev python3 build-essential && \
+    apt-get install -y --no-install-recommends libsqlite3-dev python3 g++ build-essential && \
     yarn config set python /usr/bin/python3
 
 USER node
@@ -200,12 +201,13 @@ RUN mkdir packages/backend/dist/skeleton packages/backend/dist/bundle \
 # Stage 3 - Build the actual backend image and install production dependencies
 FROM node:16-bullseye-slim
 
-# Install sqlite3 dependencies. You can skip this if you don't use sqlite3 in the image,
+# Install sqlite3 and isolated-vm dependencies.
+# You can remove libsqlite3-dev if you don't use sqlite3 in the image,
 # in which case you should also move better-sqlite3 to "devDependencies" in package.json.
 RUN --mount=type=cache,target=/var/cache/apt,sharing=locked \
     --mount=type=cache,target=/var/lib/apt,sharing=locked \
     apt-get update && \
-    apt-get install -y --no-install-recommends libsqlite3-dev python3 build-essential && \
+    apt-get install -y --no-install-recommends libsqlite3-dev python3 g++ build-essential && \
     yarn config set python /usr/bin/python3
 
 # From here on we use the least-privileged `node` user to run the backend.
diff --git a/packages/create-app/templates/default-app/packages/backend/Dockerfile b/packages/create-app/templates/default-app/packages/backend/Dockerfile
index 51f7124db4..95a5ff52d1 100644
--- a/packages/create-app/templates/default-app/packages/backend/Dockerfile
+++ b/packages/create-app/templates/default-app/packages/backend/Dockerfile
@@ -11,12 +11,13 @@
 
 FROM node:16-bullseye-slim
 
-# Install sqlite3 dependencies. You can skip this if you don't use sqlite3 in the image,
+# Install sqlite3 and isolated-vm dependencies. 
+# You can remove libsqlite3-dev if you don't use sqlite3 in the image,
 # in which case you should also move better-sqlite3 to "devDependencies" in package.json.
 RUN --mount=type=cache,target=/var/cache/apt,sharing=locked \
     --mount=type=cache,target=/var/lib/apt,sharing=locked \
     apt-get update && \
-    apt-get install -y --no-install-recommends libsqlite3-dev python3 build-essential && \
+    apt-get install -y --no-install-recommends libsqlite3-dev python3 g++ build-essential && \
     yarn config set python /usr/bin/python3
 
 # From here on we use the least-privileged `node` user to run the backend.