In an increasingly global economy, maybe it's futile to stamp any design with a national identity. But Britain still reigns when it comes to exporting cool.

This was the year that London-born Jonathan Ive made the journey from the butcher-block desks and cast-aluminum task chairs of his studio in Cupertino, California, to the audience chamber of Buckingham Palace so that Queen Elizabeth II could knight him. You could call it a case of stable doors and bolted horses. Britain was recognizing one of its most successful designers more than a decade after he left the country to help make Apple the United States' most valuable company.

The moment could be seen as a reminder of the essentially borderless nature of design. An iPhone comes in a glossy black or white box with the words 'Designed by Apple in California' printed on the back, but it is made by Taiwanese-owned companies in Chinese factories with components that come from nine different countries. Is an iPhone, then, a piece of British design, based on the country of origin of Apple's chief designer? Is it Chinese? Is it American? Or is it futile to attempt to give it a national identity at all?

Britain is in an unusually self-reflective mood in 2012. The Queen is celebrating her 60th year on the throne, while the country is staging the Olympic Games for the second time in her life. Meanwhile, Scotland is working up to a referendum to ask its citizens if they want to leave Britain to become independent.

To ask, 'What is British design?' is a self-defeating question, when even the most iconic British car of the 20th century, the Mini, is now owned by BMW, a German company. And, in any case, it was originally designed by Alec Issigonis, born of Greek parents in Turkey and forced to come to London as a refugee. When some of the most gifted British-based designers have come from abroad, such as Ron Arad (Israel) or Zaha Hadid (Iraq), it is better perhaps to talk about design in Britain.

Because Britain was one of the first counties to undergo an industrial revolution, it was also one of the first to develop the contemporary practice of design, the intermediary between maker and consumer. It built a network of art and design schools of which Jony Ive and so many other celebrated designers, from Christopher Bailey to Stella McCartney, are the products. Their success continues to attract students from around the world. Many of them stay here, adding to what makes London, in particular, a center for design of all kinds.

This self-consciousness about design has helped shape the 2012 Olympics, and not just in terms of the architecture. The Olympic torch, winner of this year's Design Museum Design of the Year Award, was created by Edward Barber and Jay Osgerby. BarberOsgerby has made its name internationally with refined furniture and industrial designs that have breathed new life into the language of Modernism. The Olympic cauldron is the work of another British designer, Thomas Heatherwick. He is responsible for the striking UK Pavilion at the 2010 Shanghai Expo and the new double-decker London bus.

Britain doesn't actually manufacture too many smartphones, or T-shirts, but it has been pretty good at turning out the people who can. It's also been good at questioning design, not just seeing it as a sales tool. Ever since William Morris, Britain has taken a critical line about design, as opposed, let's say, to the more commercial approach of Raymond Loewy. Morris believed it was the job of the designer to make the world a better place. Loewy styled things to look beautiful, but also to sell. You can see this distinction in recent acquisitions by the Museum of Modern Art in New York. Of the British objects collected in the last decade, you will find a Jaguar E-Type and a Vincent motorcycle. But the largest number of objects come from Tony Dunne and Fiona Raby, and their students at the Royal College of Art. Paola Antonelli, MoMA's senior curator of architecture and design, acquired Dunne, Raby, and Michael Anastassiades's 'Huggable Atomic Mushroom' (2004), a satiric cuddle toy and bitter commentary on the futility of design in the face of an apocalyptic future, and their even more troubling video 'Designs for an Overpopulated Planet' (2009). These pieces provoke and make us question the role of design in encouraging us to consume.

Twenty-five years ago, the sense that Britain had not always made the most of its potential as a center for new thinking about design drove Terence Conran and Stephen Bayley to set up the original Design Museum. It became a gadfly irritant inside the V&A (Victoria and Albert Museum), its original host, and served as a reminder that design is about the future as well as the past, and about mass production and new technology as well as craft.

The Design Museum has operated since 1989 in its current building, a former banana warehouse transformed into a facsimile of the Bauhaus on the Thames. This year, it will move into the former Commonwealth Institute, which opened in 1962 to mark British decolonization. A landmark structure somewhat in the manner of Saarinen's TWA terminal, the building has been empty for a decade. Its rebirth as a museum is part of a wider development of a garden site in Kensington, planned by Reinier de Graaf of OMA with landscapes by West 8, which will include 60 apartments in three low-rise blocks. The museum is working with John Pawson to bring the derelict building back into use, and provide 100,000 square feet, three times what it has now. When it opens at the end of 2014, it's expected to attract 500,000 visitors a year. It's the chance to create a new paradigm for what a museum of contemporary design and architecture can be.

Deyan Sudjic is an architecture and design critic, curator, and the director of the Design Museum, London.