Italy are unbeaten in six games since Conte replaced Cesare Prandelli as coach in the wake of a second consecutive first-round exit from the World Cup last summer.
The four-time World Cup winners sit second in Group H of Euro 2016 qualifying following three successive wins over Norway, Azerbaijan and Malta and a hard-fought 1-1 draw in Milan with leaders Croatia last Sunday.
But after Sampdoria striker Stefano Okaka's late winner saved a second-string Italy against Albania on Tuesday, Conte lashed out at Serie A's clubs and the young players they are currently producing.
Talking directly to reporters after the game in Genoa, he said: "You do not want to face up to certain things, that is the big problem. Our product is dying out. We're going through a difficult generational change.
"We're happy to have ten points from our group games thanks to the pride of players who have put in the hard work.
"But we need to improve on everything: strength, fitness, and an overall desire to dig deep."
Following a 1-0 friendly defeat to Spain last March, former coach Prandelli sounded the alarm when he said: "Our physical condition compared to our rivals is almost embarrassing."
Conte was appointed to lift the fallen Azzurri back among the world's great national sides, but after just six games the former Juventus midfielder appears frustrated at the task he faces.
"I knew it wouldn't be easy: I'm putting a lot of enthusiasm and desire into helping the younger players develop," added Conte, who led Juventus to three straight league titles before taking the Italy job.
"People want results immediately but often forget the climate we're working in.
"We now struggle to churn out talent and those who do come through often don't have the right attitude."
Mario Balotelli, who left Italy's training camp last week with a hamstring injury, has still not played under Conte having last pulled on an Azzurri shirt at their disastrous World Cup.
When pressed to gauge the future of the controversial Liverpool striker, who was spotted out partying at 4.30am in London last week following the Reds' defeat to Chelsea, Conte lost his cool.
"With all the problems we have in Italian football, we are still talking about whether Balotelli goes to a disco or not! I find it ridiculous," said Conte.
But the Italy handler said he did not have the magic formula to solve the mystery of Balotelli, who has fallen foul of several top coaches in the past, including Jose Mourinho and Roberto Mancini.
"I'm not so presumptious as to believe I'm different from some great coaches. The past tells us that they failed to change Balotelli," said Conte. "It's up to player, but I don't have much time..."
With Italy's next qualifier in March, Conte also called for clubs' collaboration as he seeks to organize national team get-togethers.
"We can't have a gap of four months with nothing in between. It seems the national team comes second to everything else," he said.
"As usual, all the focus and attention goes on Serie A, and that is not always good news for the national team.
"Everyone says we're going through a tough time, and that it has to change. Then you look around you and realize you're on your own."