100% Design, which opens today, is London's most fashionable furniture fair.

In Its first incarnation, 100% Design was just another furniture trade fair - albeit one with a reputation acquired in just two years for being sharper than many. Which is to say, it had the wit to camouflage the humourless Teutonic five-wheeled office chairs, manufactured by companies with the budgets to pay for the largest stands, behind a fringe of playful, energetic work from a younger generation of designers struggling to get themselves noticed.

Its main function was the serious business of selling newly imported Italian lights to people who design hotels and offices. But, almost by default, it was also an event which gave a generation of Britain's designers the chance to put their work in front of the retailers and the specifiers whose interest might give their fledgling careers a significant boost. It was even a chance to show their work to the public, who might actually want to put it in their own homes.

Now that design has become a central plank in Tony Blair's programme for a shiny new Britain, that second role has taken on increasing significance, and 100% Design stands a good chance of being turned into a kind of national showcase. We are constantly told by its boosters that Britain is a world centre for creative design, which squanders its talent abroad. This show offers a chance to see if the claims are true.

The biggest problem for a young furniture or product designer is the complexity of modern manufacturing. It's possible for a fashion design graduate with sufficient skill to cut and stitch a suit that has all the quality of a designer label version. But it simply isn't possible for young independent furniture designers to muster the massive investment required to produce the tooling needed to make an injection-moulded plastic chair, or a die-cast aluminium table leg. These are objects that need to be made in hundreds to make any economic sense. Neither is the craft alternative a convincing substitute. All our senses have been seduced by the perfection of machine-made production, and the handmade simply looks crude as an alternative. There is no point trying to work sheet metal or plywood into the smooth supple shapes of which moulding is capable.

But at 100% Design, it's not just the mass-produced designs that get a showing; it's also a place in which designers operating on the fringes of manufacturing get a chance to take part. The young designers here have tended to pursue a light-on-their-feet course, trying to side-step the problems of producing work in small quantities through sheer ingenuity. Adopting simple industrial techniques such as sand casting, or metal bending, they make pieces that they can self-fund before hooking a production deal.

This kind of ingenuity is the driving force behind a new element at this year's show: 101% Glasgow, an exhibition within the exhibition. Glasgow is a city which is jealous of its reputation as second only to London for producing creative design talent in Britain. It's also the city which in 1999 will be UK City of Architecture and Design. And 101% Glasgow offers a taste of all that with a showcase of new home-grown furniture, accessories and textiles.

Britain as a whole, never mind Glasgow, simply does not have the major furniture manufacturers with the resources to invest in sophisticated techniques. What Glasgow does have is an eye for ingenious, cheerful scavenging. Katarina Barat and Will White, for example - who between them constitute the design team, manufacturing department and sales force of One Foot Taller - picked up on a supply of moulded glass recycled from front-loading washing machines. With some judicious sandblasting, they make striking fruit bowls. Fit two together and you get a floor lamp. Now they are using the door rims as well to make mirrors.

But it's not all scavenging. Timorous Beasties another of the design groups exhibiting, make strikingly beautiful textiles which combine surrealistic imagery with strong colour. Squigee specialises in screen-printed fabrics and furniture with an architectural approach. Sam Booth of IWD had the idea of translating the punched-metal folding techniques used to make the housings that normally accommodate electronic equipment to the scale of furniture.

The point about design is that it is both a cultural and an economic issue. It matters to Britain as a whole, and to Glasgow in particular, because it is one of the ways in which a distinctive identity can be expressed: the city's new clubs, bars and fashion outlets reflect its belief in putting on a show, and having a good time. But it is also about the economy. Design isn't just a cynical technique that can be used to sell more stuff, it actually helps to unlock wider economic potential. You can see that in a modest way in One Foot Taller's new range of accessories, which use the skills of a local saddler to create leather wine and magazine racks.

It's also part of the reason why Glasgow 1999 and the Glasgow Development Agency have helped stage 101% Glasgow. The GDA's Glasgow Collection project aims to fund the prototyping of designs and connect manufacturers with designers - one example is Submarine's stylish stainless steel bath. The designers got together with a metal fabricator in the city whose major business is making vandal-proof toilets for prisons. The result is a striking new piece of design, one which, if all goes well, has imaginatively and ingeniously extended the economic base of the city in a small way. It also helps answer the question, just what is it about design in Britain that is so special.!

! Deyan Sudjic is director of Glasgow 1999 UK City of Architecture and Design.

100% Design is open to the public on 1 Oct, 10am to 8pm, at Duke of York's Headquarters, King's Road, London SW3. Tickets cost pounds 12, or pounds 6 if pre-booked on 0181 240 5070.

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