The former Preston North End manager recently returned from visiting Dinamo's successful youth academy.
"It wasn't anything revolutionary but it reinforced my own beliefs. Their attention to detail in terms of the technical development of players was outstanding. I left academy football in 2002 to come to Everton with David (Moyes), and at the time all the talk was about how the continental players are better technically than we are," he told the Liverpool Echo.
"I came back just over a year ago and people were saying the same thing. That surprised me. I was disappointed. I thought, 'What have we been doing for 10 years?"
"Zagreb have got a lot of players playing in the top leagues around Europe. They said in their presentations they've got 25 ex-players in the top leagues in Europe. Their academy is run for a different reason than ours. Ours is to produce players for the first team, theirs is to produce players to sell.
"They tell me they've got the next ones lined up as well, and having seen them I can believe that. They're way ahead of where we are. I looked at them from under-19s to under-9s. There was nothing I saw that I hadn't before.
"I didn't see circus acts either. I saw functional footballers, performing techniques in the right way with an intensity in terms of the tempo and concentration."