The issues you raise are complex. It's interesting to think of local/global as parallel to here/there. There are very strong forms of "there", as in the case you mention of Germany during the Holocaust, and the "here" of Israeli artists trying to find ways of expressing a new/old local identity.
There is the "there" of what is happening in the arts in the places that are considered to be the "centers" of the art world, and the "here" of artists working at the local level, embedded in local identities. How does the local become relevant to a larger audience? You are right that more artists today are confident in their identity, and in the relevance of their experiences. They have also more access to the global, thanks to the internet and the new media. Maybe the local has more chances to become a voice on the global scene. But what is the global scene? How many voices does it have?