"It's crucial, we have to develop our own talent as a club," said Southgate.
"There's a lot of bright futures ahead. It's incredible really, we're unbelievably young. Part of that is through necessity but part of it is the talent and attitude of the kids coming through.
"We've seen Josh Walker come into the first-team and do exceptionally well, Matthew Bates coming back and Adam Johnson's been very good lately. We've just signed Seb Hines to a two-year deal, we recently got Rhys Williams signed and he's doing well at Burnley. We've got Jonathan Grounds who's doing well at Norwich."