diff --git a/lib/plugins/create/templates/aws-nodejs-typescript/package.json b/lib/plugins/create/templates/aws-nodejs-typescript/package.json
index 002a8fadf..807729b38 100644
--- a/lib/plugins/create/templates/aws-nodejs-typescript/package.json
+++ b/lib/plugins/create/templates/aws-nodejs-typescript/package.json
@@ -12,10 +12,12 @@
   "devDependencies": {
     "@types/aws-lambda": "^8.10.17",
     "@types/node": "^10.12.18",
+    "fork-ts-checker-webpack-plugin": "^3.0.1",
     "serverless-webpack": "^5.2.0",
     "ts-loader": "^5.3.3",
     "typescript": "^3.2.4",
-    "webpack": "^4.29.0"
+    "webpack": "^4.29.0",
+    "webpack-node-externals": "^1.7.2"
   },
   "author": "The serverless webpack authors (https://github.com/elastic-coders/serverless-webpack)",
   "license": "MIT"
diff --git a/lib/plugins/create/templates/aws-nodejs-typescript/serverless.yml b/lib/plugins/create/templates/aws-nodejs-typescript/serverless.yml
index 35ecb7f7f..b00954455 100644
--- a/lib/plugins/create/templates/aws-nodejs-typescript/serverless.yml
+++ b/lib/plugins/create/templates/aws-nodejs-typescript/serverless.yml
@@ -4,6 +4,11 @@ service:
 #app: your-app-name
 #org: your-org-name
 
+custom:
+  webpack:
+    webpackConfig: ./webpack.config.js
+    includeModules: true
+
 # Add the serverless-webpack plugin
 plugins:
   - serverless-webpack
@@ -11,6 +16,10 @@ plugins:
 provider:
   name: aws
   runtime: nodejs10.x
+  apiGateway:
+    minimumCompressionSize: 1024 # Enable gzip compression for responses > 1 KB
+  environment:
+    AWS_NODEJS_CONNECTION_REUSE_ENABLED: 1
 
 functions:
   hello:
diff --git a/lib/plugins/create/templates/aws-nodejs-typescript/tsconfig.json b/lib/plugins/create/templates/aws-nodejs-typescript/tsconfig.json
index 7aa5aad6a..20f492b54 100644
--- a/lib/plugins/create/templates/aws-nodejs-typescript/tsconfig.json
+++ b/lib/plugins/create/templates/aws-nodejs-typescript/tsconfig.json
@@ -1,6 +1,7 @@
 {
   "compilerOptions": {
     "lib": ["es2017"],
+    "removeComments": true,
     "moduleResolution": "node",
     "noUnusedLocals": true,
     "noUnusedParameters": true,
@@ -8,5 +9,12 @@
     "target": "es2017",
     "outDir": "lib"
   },
-  "exclude": ["node_modules"]
+  "include": ["./**/*.ts"],
+  "exclude": [
+    "node_modules/**/*",
+    ".serverless/**/*",
+    ".webpack/**/*",
+    "_warmup/**/*",
+    ".vscode/**/*"
+  ]
 }
diff --git a/lib/plugins/create/templates/aws-nodejs-typescript/vscode/launch.json b/lib/plugins/create/templates/aws-nodejs-typescript/vscode/launch.json
new file mode 100644
index 000000000..df159c7d1
--- /dev/null
+++ b/lib/plugins/create/templates/aws-nodejs-typescript/vscode/launch.json
@@ -0,0 +1,14 @@
+{
+  "configurations": [
+    {
+      "name": "Lambda",
+      "type": "node",
+      "request": "launch",
+      "runtimeArgs": ["--inspect", "--debug-port=9229"],
+      "program": "${workspaceFolder}/node_modules/serverless/bin/serverless",
+      "args": ["offline"],
+      "port": 9229,
+      "console": "integratedTerminal"
+    }
+  ]
+}
diff --git a/lib/plugins/create/templates/aws-nodejs-typescript/webpack.config.js b/lib/plugins/create/templates/aws-nodejs-typescript/webpack.config.js
index 3fddde6b7..168adfeb0 100644
--- a/lib/plugins/create/templates/aws-nodejs-typescript/webpack.config.js
+++ b/lib/plugins/create/templates/aws-nodejs-typescript/webpack.config.js
@@ -1,12 +1,17 @@
 const path = require('path');
 const slsw = require('serverless-webpack');
+const nodeExternals = require('webpack-node-externals');
+const ForkTsCheckerWebpackPlugin = require('fork-ts-checker-webpack-plugin');
 
 module.exports = {
+  context: __dirname,
   mode: slsw.lib.webpack.isLocal ? 'development' : 'production',
   entry: slsw.lib.entries,
-  devtool: 'source-map',
+  devtool: slsw.lib.webpack.isLocal ? 'cheap-module-eval-source-map' : 'source-map',
   resolve: {
-    extensions: ['.js', '.jsx', '.json', '.ts', '.tsx'],
+    extensions: ['.mjs', '.json', '.ts'],
+    symlinks: false,
+    cacheWithContext: false,
   },
   output: {
     libraryTarget: 'commonjs',
@@ -14,10 +19,33 @@ module.exports = {
     filename: '[name].js',
   },
   target: 'node',
+  externals: [nodeExternals()],
   module: {
     rules: [
       // all files with a `.ts` or `.tsx` extension will be handled by `ts-loader`
-      { test: /\.tsx?$/, loader: 'ts-loader' },
+      {
+        test: /\.(tsx?)$/,
+        loader: 'ts-loader',
+        exclude: [
+          [
+            path.resolve(__dirname, 'node_modules'),
+            path.resolve(__dirname, '.serverless'),
+            path.resolve(__dirname, '.webpack'),
+          ],
+        ],
+        options: {
+          transpileOnly: true,
+          experimentalWatchApi: true,
+        },
+      },
     ],
   },
+  plugins: [
+    // new ForkTsCheckerWebpackPlugin({
+    //   eslint: true,
+    //   eslintOptions: {
+    //     cache: true
+    //   }
+    // })
+  ],
 };