Before I go much further, it's important to point out a couple of the variables that we cannot affect; Youth Rating and Game Importance are set on a national level, and are hidden, so we can't actually see or change them.
Youth Rating sets the general standard of youth player coming through in that nation. For example, with South American wonderkids the floor there is higher than other nations as the youth rating is higher. Game Importance refers to how highly the sport of football ranks in that nation's hierarchy. In that instance, it'll be higher somewhere like Spain than it would be in the USA, where soccer is fourth or fifth in terms of popularity. We cannot change either of these values, but they do explain why some nations become production lines for world-class Wonderkids as a save progresses.
So what about the aspects that we can control? What we need to focus on are our Facilities and Staff. The facilities at our clubs influence the quality and potential of the Newgens coming through the academy system, while the staff we employ help to guide their development after they arrive in the Under-18s.

Looking first at our facilities, there are three aspects we need to consider: Youth Facilities, Junior Coaching, and Youth Recruitment. Each of these plays a very specific role in the development of your Newgens before they hit your youth intake. The only way we can improve each of these is to continually ask the board to improve them, until they reach their maximums.
Youth Recruitment relates to how your club's scouting and recruitment networks work at a youth level; you can think of this as the scouting, training camps, and recruitment work that goes on in your club's local area and further afield. The better your youth recruitment, the more likely you are to be able to attract top talent to your club. This is especially important if you're managing a club in a particularly busy part of a country, where you are competing with multiple other clubs for a player.
Youth Facilities do what they say on the tin - they are the training facilities that your academy players use before they arrive on youth intake day. That's an important distinction; they're not the facilities that your controllable youth teams use (those are your training facilities), but they work in the background to drive the development of your Newgens before intake day. The better these are, the better your Newgens will be when they arrive at the club.

Also key is your Junior Coaching. This gives you an indication of the quality of the coaching staff that you've got running the sessions in your youth facilities. You have little direct control over this; you can't hire specific junior coaches, so all you can do to improve quality here is to ask the board to keep improving the Junior Coaching at the club. In combination with your Youth Facilities, Junior Coaching will impact the Current and Potential Ability of your Newgens until intake day, when they are set and the Newgens appear in your youth intake.
The final piece of the puzzle is your Head of Youth Development and, by extension, the coaches you have in your Under-18 and Under-21 (or equivalent) teams.
Your Head of Youth Development plays a couple of very important roles in the development of Newgens. Firstly, their preferred system will impact the types of players you get in your intakes. So, for example, a Head of Youth Development who prefers to play a 5-3-2 is likely to produce more wingbacks and central midfielders, while someone favouring a 4-3-3 would bring through more wingers.
This means it is crucial to find a Head of Youth Development who prefers your shape; I would also try to align their tactical styles to your own as much as possible, to ensure your youth players are playing football the way you want it to be played in the first team.

The second aspect to watch out for in your Head of Youth Development is their personality. For every Newgen coming through your youth intake, there is a chance that your Head of Youth Development will pass their personality onto the player (or aspects of it). This is important because a player's personality is one of the biggest factors in how quickly and how well they develop.
Some of the top-tier ones to look for are model citizen, perfectionist, model professional and professional - these all have a great mix of determination and professionalism that sees players really apply themselves in training and in matches, leading to better development.

While there are aspects of your Youth Intake which will remain random, which is part of the fun of a long-term FM26 career, there are elements that you can directly influence to improve the quality coming through year after year.
With stronger prospects coming through, it’ll be easier for you to shape a development pipeline that allows you to push your club to the top of the game.
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