Not really sure I understand Southgate's concerns, England haven't had it so good with young English players players regularly playing in the top level for a long, long time. Plus we now have the likes of Bellingham, Sanchez, Tomori, Maduke, etc, who have gone overseas at a young age and nailed it, that certainly has never happened before.
The fact he chooses to keep picking the likes of Maguire and Phillips despite them not playing club football doesn't mean the system is broke, it just means that he is being safe / loyal.