New kids on the fashion block

British fashion's reputation is rooted in the strength of its design colleges and universities. Harriet Walker reports on the fresh talents at this year's graduate shows

There are some stark choices facing this year's crop of fashion graduates, who have been showing their final year collections in the capital for the past month.

While the balance between creative and commercial has always been a fine one to strike, the decision to shock or to sell takes on even more importance given widespread unemployment and the on-going difficult climate for retail.

"They've got to find jobs," agrees Rob Templeman, chairman of Graduate Fashion Week and of The British Retail Consortium. "At the moment there's 1.5 million under-24-year-olds unemployed. Fashion's moving, and you need younger people to help move it on."

After last year's GFW event, title sponsors George took on 68 fresh faces across their head office, in both design and marketing roles, including last year's Gold Award winner Rory Langdon, who has since created a sell-out collection for the brand. "We realise that the talent of tomorrow is the lifeblood of our business," says Fiona Lambert, George's brand director, "and we need that fresh young talent, because newness is what's driving the business forward."

George, along with seven other high street names including Karen Millen, New Look and House of Fraser, are also part of the GFW "protégé programme", which aims to place graduates in temporary – but paid – employment, so they can bolster their CVs and chances of getting something more permanent.

This year's Gold award winner, womenswear graduate Chloe Jones from Bath Spa university, impressed judges with sportified silk maxidresses, rendered modern with hoods and toggles, delicately finished with butterfly prints and raw hems.

Her collection will be adapted to make a high-street line, which will be sold by George later this year. There was innovative use of knits and textiles too, in Kingston University student Caitlin Charles-Jones's bright and futuristic wool separates, which featured Aztec-inspired go-faster stripes and rigid tubi sleeving picked out in high-gloss and iridescent metal threads. Both collections had a sense of directional wearability, blending complex design with something more ubiquitously palatable.

Meanwhile, the Zandra Rhodes award for Textile Innovation went to Xiaoping Huang of Lancashire University, for his deckchair-striped voluminous and three-dimensional concertina-pleated tailoring. While not traditionally commercial, there were aspects of this young designer's work which showed great potential for an imaginative take on mass-produced womenswear – something which the high street sponsors are keen to invest in. But there is a different, and more difficult, direction to take: while many college-leavers will choose to work for big high street names and corporate conglomerates, there are those who aim to make it on their own. And although the terrain is particularly inhospitable to small businesses and those starting out right now, the A-list's increasing tastes for the unknown – and more importantly, the as yet un-copied – mean there are more avenues than ever for graduates to taste success even at this early stage in their careers.

"Anyone who wants to start their own label, should ask themselves if that is really and truly the only thing they want to do," advises designer David Koma, who was also a judge at this year's event. He won awards for both his BA and MA collections at Central Saint Martins, before shooting to fame soon afterwards when his metallic, art deco designs were worn by both Beyoncé and Rihanna in the same week. "It is very, very hard and talent is only one of many elements you need."

But for Claire Barrow, who left Westminster University last month, it is about to become a reality. She has already had her pieces – intricately illustrated leather separates in a grungy, punkish vein – featured in Vogue, has designed a capsule for Joseph, a range of shoes for the brand Underground and is set to show at London Fashion Week in September.

Her classmate Ashley Williams, whose ironic trash-luxe collection was inspired by Texan oil wives and featured shopping bags reworked as jumpers and coats, had a host of celebrity friends (Alice Dellal, Pixie Geldof et al) modelling her creations at her graduation show and has already dressed pop star Rita Ora. In this age of Lady Gaga and directional divas, eye-catching and original graduate designers stand to gain plenty of exposure if they choose this sort of route.

"These students are very rare," says the director of Westminster's fashion design course Andrew Groves, "and most prefer to work within a design studio. It's a tough market – more than 3,000 people will be graduating with a fashion-related degree, so employers can pick the very best.

"But what's also vital is having a great personality – the hours in this industry are very long, and it doesn't matter how good you are as a designer, people need to enjoy being in your company as well." With some of the wit and warmth on show, it seems young London designers are an easy-going bunch: at Central Saint Martins in particular (showing its students' work for the first time in its new home in King's Cross), humour was prevalent as a weapon in the armoury against the potentially bleak employment market these designers are about to face.

Tigran Avetisyan's menswear featured oversized shirts and smocks covered in blackboard graffiti that read "so much pressure" and "nothing left to say", with models exiting to a soundtrack of Pink Floyd's "We Don't Need No Education".

Less strident, although just as characterful, were Ruoxin Jin's marvellously intricate knitted pieces: heavy on construction and bright colours, they also featured hundreds of painstakingly rendered knitted warrior figures, clutching spears and shields, climbing across sleeves, yokes, even hats.

And Molly Goddard's oversized crinoline dresses, layered in delicate doily crochet and gauzy neon pink tulle, combined prettiness with a certain nonchalance – a sort of statement dressing for the understated, which perfectly suited the mood and showcased her talents for texture and palette. Erin Hawkes, winner of the Young Design Talent Award, opened the show with a collection of loose-fitting and mannish modern-rustic pieces. She subverted latterday staples such as plaid and hoodies, with nostalgic, almost puritanical, apron skirts and Flemish-style hoods.

At the Royal College of Art, which showed collections from its MA students, menswear was treated inventively and irreverently, flouncing prettily as sporty pink separates by Hiroaki Kanai and as geometrically patterned tailoring, which bulged and distorted with extrusions that cleverly rendered print as structure, by Ichiro Suzuki.

Womenswear was rather more pragmatic though no less imaginative: Holly Russell's holographic and iridescent pieces set a tone of low-key, androgynous and accessible glamour, done with one eye on sales – it was easy to imagine a Topshop-friendly version of her high-waisted shimmering jeans, for example. Rebecca Thomson's printed-silk shirtdresses and all-in-ones were practical and chic; the furry gauntlets and veiled hats topped off with fuzzy pom-poms worn by her models belied the innate commercial nature of the collection.

Given the financial pressures on students these days, perhaps it comes as no surprise that the graduate collections feel more and more professional every year. It has been a rousing and spirited showing from the country's young talents – the future may be uncertain for them right now, but it'll certainly be bright.