The national side saw their hopes of qualifying for the World Cup in Brazil officially ended by Tuesday's 2-0 defeat in Serbia.
It was their sixth Group A fixture without victory and means their 15-year wait to compete in a major finals goes on.
But Wotte, the Scottish Football Association's performance director, insists more attention has to be paid to the way young players are developed.
He pointed to Belgium, currently topping the Dark Blues' qualifying group, as a shinning example of how a country can re-establish itself on the international stage following a period of stagnation.
In a blog published on the SFA's website, he said: "Fifteen years have passed since we last qualified for a major tournament. It is too long for a country with such a proud history and such a passionate support.
"But we have two options: we either wallow in self-pity, or we address the reasons behind that decline. We have to change our philosophy and our approach to elite talent identification and development.
"To borrow the wisdom of Einstein: insanity is doing the same thing over and over again and expecting different results.
"The reality is that in the time since Scotland opened France 98 against Brazil, many nations across the continent have evolved at a rate superior to our own, both physically and technically.
"We have little alternative but to accept that inconvenient truth and do something about it."