Premier League clubs this week face resurgent Bundesliga sides who are reaping the benefits of a well-run league and a revamped youth system

Steve McClaren tells an instructive anecdote about German football's mindset which might give certain English coaches and players pause for thought.

During his time in charge of Wolfsburg last season, the Nottingham Forest manager fell into conversation with a young player. The subject matter soon turned to tactics and McClaren decided a subtle test was in order. "I told him about our next opponents, their formation and strengths and asked him what I thought we should do," said the former England coach.

"He immediately starts moving pieces around the board, explaining how we need three at the back when operating without the ball, where we need to press, how we need to drag the man back on the left.

"He was just 21 years old and it was like he'd read all my notes so I asked him how he knew about all this and he said: 'It's how we've been taught here since we were 12.'"

Arsenal and Chelsea take on Borussia Dortmund and Bayer Leverkusen respectively in the Champions League on Tuesday, two German sides at the heart of a vibrantly renascent football culture that is currently reaping the benefits of not only that emphasis on education but also a strictly austere economic policy.

After more than a decade devoted to building a comprehensive, compulsory academy system, penalising teams who fall into debt and ensuring that supporters retain a say in the running of clubs effectively immune from foreign takeovers, the once deeply unfashionable Bundesliga is in rude health. While the national side has remained a force on the world stage, at club level Germany spent the first few years of the 21st century as European also-rans.

Things began shifting on to an upward trajectory shortly after the Bundesliga appointed a dynamic new chief executive, Christian Seifert, in 2005. By 2010 Bayern Munich were losing Champions League finalists while this year Schalke ruffled a few egos en route to the semi-finals.

Along the way Germany began producing some of Europe's finest, most coveted, young players. Significantly, José Mourinho's Real Madrid, have been revamped along high-quality Germanic lines with Real raiding Werder Bremen for Mesut Ozil, Stuttgart for Sami Khedira and, most recently, Dortmund for Nuri Sahin.

While England's Premier League boasted the most participants during last year's World Cup, the Bundesliga, rather than La Liga or Serie A, proved the second most represented league in South Africa with 84 players involved.

As Arsenal should discover when they face Mario Götze, Dortmund's creative catalyst and the star product of an outstanding academy, Germany is now adept at producing highly imaginative, technically accomplished footballers. Eminently capable of thinking laterally while operating "between the lines", they are quite frequently configured in 4-2-3-1 formations.

"There's a great seriousness about learning and understanding football out there," says McClaren. "Coaching is a real profession, it's definitely harder to qualify as a coach in Germany."

Such rigour extends to a financial sphere dominated by the nation's famous 50+1 ownership regulations. Under these rules it is stipulated that a minimum 50% stake plus one vote must reside with clubs' membership associations.

Known as the Mutterverein, these are essentially fans who have paid to be part of the decision-making process and collectively serve as a shield repelling the possibility of takeovers by distant foreign owners or hazy hedge funds.

The only exception to the 50+1 rule permits companies with a record of investing in teams for more than 20 years to buy them outright. This explains why Volkswagen, the local employer, owns 100% of Wolfsburg and the similarly paternalistic Bayer pharmaceuticals all of Bayer Leverkusen.

The Mutterverein's enduring clout dictates that the cost of watching Bundesliga games is often 50% cheaper than Premier League equivalents. Borussia Dortmund season tickets were available for £150 last year when it was also possible to buy individual seats, albeit in the cheapest locations, for both Dortmund's and Bayern Munich's magnificently appointed homes at around £10. Small wonder average Bundesliga attendances exceed 40,000 with the champions, Dortmund, averaging almost 80,000.

Although Dortmund – the only team publicly traded on the German stock market – have experienced debt problems in recent years, clubs are compelled to prove that they expect to at least break even before being granted professional licences and this in turn guarantees that player wages rarely exceed 50% of turnover.

"We make sure our system doesn't just work in a way where somebody writes a letter and draws flowers around the numbers," says the commercially savvy Seifert, rightly proud of presiding over Europe's most profitable league. "All figures are checked by accountants.

"The key for the Bundesliga is that the ratio between turnover and players' wages is about 50%. That's crucial. Reaching a certain level of turnover and then controlling players' wages opens the door to success." Eyebrow-raising Premier League managers should note that this regimen has still enabled Bayern to fund, among others, the not inconsiderable remuneration of Franck Ribéry and Arjen Robben.

While Bayern – Manchester City's Champions League group bedfellows – have taken five domestic titles over the past 10 seasons, their dominance has been interrupted by Borussia Dortmund (twice), Werder Bremen, Stuttgart and Wolfsburg.

Seifert maintains such variety comes courtesy of 50+1. "It keeps us entertaining," he says. "To excite fans you need unpredictable competition."

Despite his Wolfsburg adventure ending in tears, McClaren remains a Bundesliga believer. "It's a very tough league," he says. "Several teams have a chance of winning it and each game feels like a cup final."