Guardiola is delighted seeing the likes of Phil Foden, Rico Lewis, Oscar Bobb and Nico O'Reilly come through the City system.
"In Barcelona, we played the Champions League final for the first time against Man United, seven played at the academy, that is the standard for the top of the academy," the City boss said.
"To play one game, the Carabao Cup, it's a good sign. James Trafford has come back after being built here, and of course in other clubs like Burnley, and Phil, Rico, Nico that are the other ones. Divine has a huge potential, but we will see in the future.
"Imagine the other players, who unfortunately left, they were top, top class players above, and could not have the space, my God, we would have a starting XI right now in the first team, because if you start to count up all the incredible players at other clubs that have been educated, being played here in the Man City academy.
"But it's a good sign that still we have loan players, like they are playing a lot, Max Alleyne at Watford has been playing really good and so many of them here have the potential to help us and see what happens. And that's why we have the academy."