The Magpies acknowledge that they cannot compete with the lavish spending of some of their Premier League rivals, forcing them to take a different approach to squad development.
Fresh faces will always be drafted in from elsewhere, with experience and proven ability vital in the English top flight.
Pardew is, however, aware of the need to keep bringing potential through the academy ranks, with Tyneside native Paul Dummett having impressed since stepping up into the senior ranks this term.
He said in the Sunday Times: "We've focused our academy on local players rather than searching the world for talent.
"We are now focusing very much in our area. I think it is an important message for our fans. That's the instruction from myself, Joe Kinnear and Mike Ashley. We want to maximise what's in our area.
"The ratio of foreign players at Newcastle is getting tight. It's important in our transfer policy that we bring in some English players.
"I'm very focused on the academy promoting talent from this area. I've said to all our scouts that I want to bring in players from here.
"We're scouring locally. That's something we need to do. We need more coaching hours with our players but, in terms of transfers to our first team, you've got to be good enough."
Pardew added: "All of our academy coaches should be proud. Everybody works so hard down there. It is brilliant for them to see somebody on the threshold of the first team.
"We have Sammy (Ameobi). We have had Dummett come through, who is definitely part of our first team squad. There's Arma (Adam Armstrong, and England U17 international) and (Adam) Campbell. We're hoping for them."