Britain’s image has taken a knocking in the past year, from phone-hacking journalists and muddy political and police operations to all-out rioting on the streets of London. But has this impacted upon the country’s creative industries? ­According to many in the design and ­architecture world, the answer is no. The UK is still stuffed with talented people doing plenty of innovative work.

Qualifications from institutions such as the Royal College of Art, Goldsmiths, Central Saint Martins and the Architectural Association are still highly valued worldwide, and many of their graduates stay on and set up shop here: Ron Arad, Marc Newson and Zaha Hadid to name just three. Global businesses such as Nokia, Yamaha and Nissan all have established design studios in London too. However, what is lacking is recognition from ­the indigenous industry and clients that they’re sitting on a mine of talent on home turf. And if they don’t know it’s here, they don’t use it, meaning these ­creatives are either exporting their wares or doing their own thing. And this is where the opportunity for Brand Britain is currently being squandered.

Next year, all eyes will be on London as host of the 2012 Olympic Games, a potential fillip for the UK’s image at home and abroad. Certainly the Games’ organisers hope that all their investment in design and architecture will turn the event into a creative showcase, not just a sporting one.

Kay Hughes, project sponsor and principal design adviser at the Olympic Delivery Authority, waxes lyrical about the transformation of the former industrial – and highly contaminated – site into a green and pleasant land. “Very early on we realised that London could not compete with the scale and expenditure of the Beijing Games, but what we could do was ‘think clever’,” says Hughes. “Most ­expenditure has gone into cleaning the land, and providing new utilities (such as the black sub-station built from perforated brickwork by Nord architects) and infrastructure to connect this new urban area to the rest of the city.” And to avoid wasting time on putting up white elephants – the bane of many an Olympic project – some of the structures are temporary, such as the Water Polo Arena, the shooting venue at the Royal Artillery Barracks in Woolwich, and the Basketball Arena. (Actually, it seems that temporary is what British design and architecture is doing rather well – sometimes out of necessity and sometimes out of choice.)

Just as important is the work of the Olympic Park Legacy Company, which is busy developing the Olympic site beyond the Games into a sustainable community. “I hope that people will also discover and talk about some of the more modest projects that we’ve been making happen in the districts around the actual Olympic Park,” says Eleanor Fawcett, head of design at the Olympic Park Legacy Company. “There are networks of new public spaces and parks, and new community buildings by some of the UK’s best young practices, all designed to help knit this part of east London together again after the Olympics are over.”

Fawcett cites Hackney Wick’s public spaces by muf, Three Mills Green by Churchman and 5th Studio, and the public realm of Stratford’s town centre by Studio Egret West. Hughes is also a great believer in the impact that the Olympic site will have on how we do things here in the future. “The lessons from the project will influence the construction industry for years to come and have been captured for use elsewhere.” Because as Vicky Richardson, director of architecture, design and fashion at the British Council, points out “very little construction is taking place in the UK, and so there are few opportunities for younger architects to test their ideas. In my experience very little is known overseas about the new generation of British architects, such as Assemble CIC, Practice Architecture, Pernilla Ohrstedt and Asif Khan.”

The problem is not a lack of architectural talent, says Richardson, but an anti-development culture and a highly regulated system of procuring architecture, which leans towards large commercial firms. “We need to have a bolder attitude to experimentation, and we need to simply build more, in order to win respect.” Elsewhere there is another sort of mismatch between London’s extraordinary creative talent and potential clients.

Through the relatively modest £50m (€57m) Outer London Fund, Mark Brearley and his team at Design for London are improving the capital’s high streets. Their focus is on those unprepossessing and distant corners such as Barking and Edgware. Brearley and his 15-strong team of architects, engineers and urban planners spend their time trying to get people excited about the potential of their own neighbourhoods. Part of their job is to sift through bids from local groups and help them then take on the creatives to improve things.

“We are trying to get the message out that London is an amazing community with extraordinary people assets (in design and architecture) and everyone should be grabbing it and using it. So why shouldn’t shopkeepers in Edgware be using the best marketers and graphic designers?” But he comes up against a disconnect of people’s understanding and awareness of the creative talent on their doorstep, and architects, and designers’ wherewithal to become involved: “A strong characteristic of creative people is that they desperately want to do things that affect people’s daily lives. But there isn’t enough awareness on both sides.”

It’s at this point that the energy of young creatives comes into its own. Pop-up environments have been an ­effective way for young designers and ­architects to sidestep the need for a client and show off their own capabilities. Brearley cites Ridley’s, a temporary restaurant on ­Dalston’s Ridley Road. The scaffold structure on a vacant lot served dishes using produce from the local market. The idea was to alert Dalston’s newcomers to the market’s delights.

Another group of creatives who bemoan the paucity of UK clients is the product designers. Morten Villiers Warren, founder of 55-strong industrial design agency Native, has only two UK clients – one of them the speaker manufacturer Bowers & Wilkins – because as a rule he finds that “although [the Brits] have a strong design education system, within business design is still undervalued. They don’t want to spend money on it.”

Industrial designers also suffer from a misleading image abroad, believes Gus Desbarats, chairman of the British Design Innovation, which promotes design at home and abroad. “Our international industrial design narrative needs to be less Cool Britannia and more ­focused on commercial effectiveness, branding and suchlike,” he says. Because UK-based commercial designers (be they industrial, retail or branding) really do make a difference to clients’ bottom lines. Desbarats is desperate to shift the agenda from “cultural and decorative” to “business and transformational”.

The big names may steal the headlines for their latest chairs and lights, but there’s an awful lot more to British design than that. “As part of this,” says Desbarats, “we need better overseas promotion of UK commercial industrial design successes like Priestmangoode, London Associates, Engine and [Desbarats’ own business] TheAlloy.” So design and architecture has so much to offer the UK, if only more UK clients knew how to commission it properly. At least the team at Design for London seem to know what they’re doing, and a good thing too, as they’re involved in allocating the extra £70m (€80m) the mayor and government have found to help improve those areas affected by last summer’s riots. If that money is well spent, and if more UK clients across the board learnt to better appreciate their home-grown creative assets, then Brand Britain would really have something to shout about.