The Dutch coaching expert has been hired to overhaul Scotland's youth development system and help rear a new generation of players as part of a long-term attempt to strengthen the national team.
But he believes too many youngsters are opting to move south too early.
Former Southampton boss Wotte drew the comparison between Celtic's James Forrest - who has remained at Parkhead in spite of interest from England - and former Aberdeen youngster Ryan Fraser.
The 18-year-old quit the Dons in January having started just 13 games with just another eight substitute appearances and moved to Bournemouth but has so far mustered just six run outs from the bench for the new SkyBet Championship side.
Wotte says Scotland's teenagers should focus on establishing themselves in their homeland first before looking to realise their English ambitions.
Speaking as he welcomed the new intake of S1 pupils attending the SFA's seven Regional Performance Schools, Wotte said: "There is a lot of talent in Scotland still. If you see all the games, they are full of youngsters. Celtic were able to hold on to James Forrest because their financial situation is much better.
"Aberdeen were in another place and maybe Ryan Fraser wanted to go down south to improve himself. We saw him play 75 minutes against Real Madrid in a friendly.
"For me, he could have stayed and played 100 games for Aberdeen. It would have pleased me as much as him going down south.
"I have always said to the boys: 'Stay in Scotland, play 100 games before you move down south, because then you go with more credibility, you are more mature and Scotland is a good place to develop your skills'.
"They will get a lot of opportunities to play first-team football up here. So why take a risk by going down south and end up on the bench?
"To play games for these kids is massive. But there are more kids starting in the first-team now in Scotland than a year ago and even more than two years ago. That makes me happy."
[Source: PA Sport]