The EDS fell to a first defeat since early February after a superb first-half free-kick proved the difference at the Academy Stadium on Thursday night.
City were unlucky to get nothing out of the game with a much-improved second-half performance, but Davies believes that losing is just as important as winning in his players’ development.
“It was actually a really good game and not something I’m too displeased about because winning and losing is important, of course it is,” said Davies.
“Our team performance and the way we created chances was quite pleasing.
“But goals change games and they took one of two or three chances and we didn’t do so well with what we created. When we got in the last third our last pass, our last cross didn’t have enough detail.
“That’s the consistency of young players being able to have the final touches to some good team play.”
A youthful City side saw 17-year-old Iker Pozo retain his starting birth in central midfield, and Davies believes that games against powerful teams will be beneficial in his football education.
“It posed different problems and it was a really good test for people like Iker [Pozo] to really assess that for himself as well,” he explained.
“We’ll help him do so because it was a real fast tempo to the game and something he’s not so used to.”
The next EDS game is the penultimate league game of the season as the young Blues face relegation-threatened Manchester United at the Academy stadium on Friday night.
And Davies views the derby as a test of a different sort for his side.
“Sometimes it poses a different question when there’s a lot of fight and aggression on the pitch, showing a calmness and a speed of thought and a speed of play to make a difference,” he said.
“Hopefully we’ll see that.”