A brief history
In 1862, President Abraham Lincoln signed the Morrill Act into law, creating what are now known as land-grant universities. These schools were established to emphasize the teaching of agriculture, science, military science, and engineering, while still including classical studies and other sciences. In 1887, the Hatch Act furthered this goal by setting up agricultural experiment stations at each land-grant university to promote agricultural research. By 1914, every state had at least one land-grant college, often called a “State College.” In 1917, Congress expanded its support by funding agricultural education through the growing high school system. Today, there are over 100 such institutions across the United States.
In 1887, the National Institutes of Health (NIH) was established as part of the Marine Hospital Service on Staten Island. It became the Public Health Service in 1912. In 1922, NIH began collaborating with universities by creating a Special Cancer Investigations laboratory at Harvard Medical School. The organization officially adopted the name National Institutes of Health in 1930 through the Randall Act. In 1944, the Public Health Service Act incorporated the National Cancer Institute into the NIH.
After World War II, the U.S. government greatly increased investment in science. Inspired by the success of the Manhattan Project and later motivated by the 1960s space race, the government funded universities to train scientists and conduct research. This marked the start of universities functioning as the research and development (R&D) arm of the federal government, especially in health and science areas.
In 1950, the National Science Foundation (NSF) was created to “promote the progress of science, to advance the national health, prosperity, and welfare, and to secure the national defense.” While the NSF mainly focuses on engineering and physical sciences, the NIH emphasizes biomedical and clinical research, though their interests often overlap.
Funding for medical and scientific R&D comes from both the private sector and the federal government. Businesses usually invest in the development phase, while the federal government—especially the NIH—focuses on basic research aimed at groundbreaking discoveries. Because the results of basic research are uncertain and the timeline for potential payoff is long, private industry often avoids such high-risk investments. Still, industry depends heavily on the foundational discoveries created by publicly funded research.
NIH supports this innovation ecosystem in two main ways: by conducting research at its own facilities and by funding external scientists through a strict grant program. Researchers from all 50 states submit grant proposals, which are assessed through a highly competitive peer-review process. Only about 20% of proposals receive funding, ensuring that support goes to the most promising research.
