What price crazed genius?

Hold on to your hats for a surreal fantasy ride. It's degree show time, and I'm inviting you to fly with me to a private view of some of our more memorable exhibits. The glutinous messes over there are rotting Chinese food trapped under the glass tops of coffee tables. The fungus-sprouting chillies and mouldy lychees represent, I'm told, the disintegration of the migrant identity. That sculpture, inspired by industrial plumbing, has been fashioned from copper pipes bent into branches and drilled into a water cylinder, interwoven with hoses and taps. And watch out - you don't want to be mown down by the student space explorer riding his bespoke time machine.

Similar extravaganzas are being staged nationwide: studios transformed into grottoes, mysterious cupboards constructed out of cardboard, landscape panoramas jostling for space with peephole fetishism and myriad replications of tortured psyches. Brick Lane in London is host to so many graduation shows that it's become an East End Biennale, teeming with startlingly clothed young artists, all set to embrace their dazzling futures.

But when the excitement dies down, the flowers wilt, the agents have left and the talent scouts vanished - what then for the creative classes of 2008? That's the question that's been increasingly troubling higher education art and design institutions as we turn out ever greater numbers of talented, driven young people.

Figures from the Higher Education Statistics Agency reveal little about what happens to these graduates once they leave us. Destination data are assessed after six months - far too early for those pursuing careers in the cultural industries. And the categories are so outmoded that while forestry, shipbuilding and industrial cleaning are listed, animation, web design, photography and fine art don't get a look-in.

To fill this gap, two initiatives have been launched. Fine Artists and Innovation, funded by the National Endowment for Science, Technology and the Arts and due to be published later this month, is a nine-month study into the working lives of seven decades of Central Saint Martins College fine arts graduates. The second, Creative Graduates - Creative Futures, will trace the careers of some 22,000 UK art, design and media graduates from more than 25 institutions. The studies aim to show not only the employment patterns of arts graduates but also their economic and cultural worth.

This is also the goal of London Higher, which recently brought together art and design colleges to ascertain how to demonstrate graduates' contribution to society. "Central Government is increasingly looking at 'public value' as a means of distributing limited resources," Sir Christopher Frayling, rector of the Royal College of Art, told the forum. "Policymakers and the wider public do not fully comprehend the wider impacts of creative and cultural arts higher education; it is overlooked, underestimated and oversimplified."

But public value is also far more difficult to assess than economic productivity. And even that isn't as straightforward as it might seem. The creative industries remain the fastest growing area of the economy, especially in London where the sector generates about £29 billion a year. But that doesn't necessarily translate into paid work. There are still far too many graduates earning a pittance as advertising interns, film company runners, camera assistants, fillers on magazines and in small studios - waiting for the big break while providing slave labour for seemingly flourishing businesses.

It's unrealistic to suppose that they're going to get jobs. These graduates are far more likely to freelance, to take on short contracts and to develop "portfolio" careers, which they will often also combine with work in unrelated fields.

So these studies are also hoping to identify the additional value that art and design graduates bring to any job, any industry - because of the nature of how they think and operate.

"For our economy to flourish," according to Creative Graduates, "the Government says it wants people with good ideas: people who are creative; people who can innovate, come up with solutions to problems and create enterprises for new services and products in a 'knowledge-based' economy."

And it's true that the hidden skills our students acquire - working in groups, briefing and taking briefs, problem-solving, project management, negotiating - prepare them better for the contemporary working environment than traditional university disciplines.

But that doesn't mean there aren't also hazards. Fine art, after all, is not primarily known for its usefulness. Let a bunch of artists loose into a normal workplace, say, and in no time everyone would be drinking from perforated coffee mugs, squatting on office chairs that have grown wings and turning twisted phone wires and teetering piles of financial reports into installations entitled "My Unmade Desk".

So it's not going to be easy to evaluate how the nation's effervescent pool of mad geniuses is contributing to a knowledge-rich society. But does it matter? You don't find English departments anxiously demonstrating the industrial applications of 16th-century lyrical discourse or how Beowulf is a model of organisational change. So why should we be so defensive?

Come back into our gallery for a moment. Peer through that golden pyramid at melting teddy bears cast in frozen milk, salute the catwalk army of bare-chested squaddies and horse-tailed female cavalry, and rejoice with me at the outpouring of verve and inventiveness. Students' wildness is our real public value, putting the UK on the map not only as a world magnet for creativity but as testimony to the principle that a flourishing democracy is one that nurtures and celebrates its artists.

Sally Feldman is dean, School of Media, Arts and Design, University of Westminster.