Swedish here, I'm convinced things are not that bad across the sound. I've seen people with masters degrees deliver really good ML systems. In my team the person with the highest education is also doing a PHD but the majority of us have masters degrees. But, sure, I've also met other companies in the same business who have multiple PHDs doing ML and they'd made a lot more progress than we had in some areas, but we'd made more progress than them in others (one company in Norway I was especially impressed with). ML development is very different from regular, software development and requires an affinity for math and creativity, sure, and a research background helps out a lot but I would not go so far and say that they're the only ones who are any good.

Have you tried hiring people who have documented experience doing ML commercially? Because I could understand how you get bummed out a lot if you hire recent grads to do ML.