The Massachusetts Institute of Technology has led the world into the future for 150 years with scientific innovations. Its brainwaves keep the US a superpower. But what makes the university such a fertile ground for brilliant ideas?

Yo-Yo Ma's cello may not be the obvious starting point for a journey into one of the world's great universities. But, as you quickly realise when you step inside the campus of the Massachusetts Institute of Technology (MIT), there's precious little about the place that is obvious.

The cello is resting in a corner of MIT's celebrated media lab, a hub of techy creativity. There's a British red telephone kiosk standing in the middle of one of its laboratories, while another room is signposted: "Lego learning lab - Lifelong kindergarten."

The cello is part of the Opera of the Future lab run by the infectiously energetic Tod Machover. A renaissance man for the 21st – or perhaps 22nd – century, Machover is a composer, inventor and teacher rolled into one. He sweeps into the office 10 minutes late, which is odd because his watch is permanently set 20 minutes ahead in a patently vain effort to be punctual. Then, with the urgency of the White Rabbit, he rushes me across the room to show me the cello. It looks like any other electric classical instrument, with a solid wood body and jack socket. But it is much more. Machover calls it a "hyperinstrument", a sort of thinking machine that allows Ma and his cello to interact with one another and make music together.

"The aim is to build an instrument worthy of a great musician like Yo-Yo Ma that can understand what he is trying to do and respond to it," Machover says. The cello has numerous sensors across its body, fret and along the bow. By measuring the pressure, speed and angle of the virtuoso's performance it can interpret his mood and engage with it, producing extraordinary new sounds. The virtuoso cellist frequently performs on the instrument as he tours around the world.

When Machover was developing the instrument, he found that the sound it made was distorted by Ma's hand as it absorbed electric current flowing from the bow. Machover had a eureka moment. What if you reversed that? What if you channelled the electricity flowing from the performer's body and turned it into music?

Armed with that new idea, Machover designed an interactive system for Prince that the rock star deployed on stage at Wembley Stadium a few years ago, conjuring up haunting sounds through touch and gesture. Later, two of Machover's students at the media lab had the idea of devising an interactive game out of the technology. They went on to set up a company called Harmonix, based just down the road from MIT in Cambridge, Massachusetts, from which they developed Rock Band and Guitar Hero.

From Ma's cello, via Prince, to one of the most popular video games ever invented. And all stemming from Machover's passion for pushing at the boundaries of the existing world to extend and unleash human potential. That's not a bad description of MIT as a whole. This maverick community, on the other side of the Charles River from Boston, brings highly gifted, highly motivated individuals together from a vast range of disciplines but united by a common desire: to leap into the dark and reach for the unknown.

The result of that single unifying ambition is visible all around us. For the past 150 years, MIT has been leading us into the future. The discoveries of its teachers and students have become the warp and weft of modernity, the stuff of daily life that we now all take for granted. The telephone, electromagnets, radars, high-speed photography, office photocopiers, cancer treatments, pocket calculators, computers, the internet, the decoding of the human genome, lasers, space travel . . . the list of innovations that involved essential contributions from MIT and its faculty goes on and on.

And with that drive into modernity MIT has played no small part in building western, and particularly US, global dominance. Its explosive innovations have helped to secure America's military and cultural supremacy, and with it the country's status as the world's sole superpower.

A typical MIT student 'hack' or prank: a replica Apollo lunar module on top of the university's famous dome. Photograph: Erik Nygren

As the school marks its 150th anniversary this month, it seems the US has never needed MIT's help more than it does today. The voices of the nay-sayers are in the ascendancy, questioning the US's ability to reinvent itself, to heal its wounded economy and sustain its leadership in the face of a burgeoning China. Questions too, are increasingly being asked about the ability of science and technology to address the world's problems, as optimism about the future slides into doubt. "There is a profound cynicism around the role of science that is debilitating for those in the enterprise, and devastating for this country," says MIT's president, Susan Hockfield. "If we can't figure out how to make technological innovation the path to the future, then America is not going to have invented the future, some other country will have."

She fears the US is increasingly suffering from what she calls a deficit of ambition. While 85% of MIT students are studying science and engineering, in the US as a whole the proportion is just 15%. That leaves the world's creative powerhouse vulnerable. "If you travel to Asia, to Shanghai or Bangalore, you feel the pulse of people racing to a future they are going to invent. You feel that rarely any more in the US."

Which makes MIT's mission all the more essential. "MIT has an enormous responsibility right now," Hockfield says. "We feel that deeply. It needs to be a beacon of inspiration around the power of science and technology to create a brighter future for the world."

No pressure, then.

From the moment MIT was founded by William Barton Rogers in 1861 it was clear what it was not. It was not like the other school up the river. While Harvard stuck to the English model of an Oxbridge classical education, with its emphasis on Latin and Greek as befitted the landed aristocracy, MIT would look to the German system of learning based on research and hands-on experimentation, championing meritocracy and industry where Harvard preferred the privileges of birth. Knowledge was at a premium, yes, but it had to be useful.

This gritty, down-to-earth quality, in keeping with the industrialisation that was spreading through the US at the time, was enshrined in the school motto, Mens et Manus – Mind and Hand – as well as its logo, which showed a gowned scholar standing beside an ironmonger bearing a hammer and anvil. That symbiosis of intellect and craftsmanship still suffuses the institute's classrooms, where students are not so much taught as engaged and inspired. There is a famous film of one of MIT's star professors, the physicist Walter Lewin, demonstrating the relationship between an oscillating metal ball and mass. Halfway through the experiment he climbs on to the ball and starts swinging himself around the lecture theatre in a huge oscillating arch as though he were appearing in Spider-Man on Broadway.

When Emily Dunne, an 18-year-old mechanical engineering student from Bermuda, was taking a course in differential equations recently, she was startled when her professor started singing in the middle of the lecture. "He was trying to show us how to understand overtones. It was kind of weird, but then everyone here is a little quirky," she says.

Mind and Hand applies too to MIT's belief that theory and practice go together; neither is superior to the other, and the two are stronger when combined. That conviction is as strongly held by the lowliest student as it is by its Nobel laureates (there have been 50 of them).

Take Christopher Merrill, 21, a third-year undergraduate in computer science. He is spending most of his time on a competition set in his robotics class. The contest is to see which student can most effectively programme a robot to build a house out of blocks in under 10 minutes. Merrill says he could have gone for the easiest route – designing a simple robot that would build the house quickly. But he wanted to try to master an area of robotics that remains unconquered – adaptability, the ability of the robot to rethink its plans as the environment around it changes, as would a human. "I like to take on things that have never been done before rather than to work in an iterative way just making small steps forward," he explains. "It's much more exciting to go out into the unknown."

Merrill is already planning the start-up he wants to set up when he graduates in a year's time. He has an idea for a new type of contact lens that would augment reality by allowing consumers to see additional visual information. He is fearful that he might be just too late in taking his concept to market, as he has heard that a Silicon Valley firm is already developing similar technology. As such, he might become one of many MIT graduates who go on to form companies that fail.

Alternatively, he might become one of those who go on to succeed, in spectacular fashion. And there are many of them. A survey of living MIT alumni found that they have formed 25,800 companies, employing more than three million people including about a quarter of the workforce of Silicon Valley. Those firms between them generate global revenues of about $1.9tn (£1.2tn) a year. If MIT was a country, it would have the 11th highest GDP of any nation in the world.

Ed Roberts, MIT's professor of technological innovation and entrepreneurship, says such figures belie the fact that the institute is actually quite small, with just 10,000 students and about 1,000 faculty. "That's not big. But when all those people sign up to a mission to forward entrepreneurship, you have a dramatically bigger impact. In MIT, people are encouraged not just to think bold, but to do it boldly.

"If you come up with a brilliant idea, that's OK. If you win a Nobel prize for your research, that's fine. But if you take that idea and apply it and make something transformative happen, then in MIT that's deeply admired."

Inevitably, perhaps, there is a nerdy quality to the place that is reflected in one of its much cherished traditions – the student "hack". Hack is a misleading word here, as it is less to do with cracking into computers than with hi-tech high-jinks. "Prank" is a better description.

In the student canteen you can see two of the most famous MIT hacks preserved for prosperity – a police car that was balanced on top of the institute's great dome, and a functioning fire hydrant that was erected in one of the lobbies. The latter hack, dating from 1991, was a wry comment on a former president's remark that "getting an education from MIT is like taking a drink from a fire hose". Then there is the Baker House Piano Drop, an annual institution ever since students first dropped a stand-up piano from a sixth-storey dormitory in 1972, then measured the impact that it made when it crashed on the pavement below.

Wacky, perhaps. Geeky, certainly. But also extraordinarily difficult technically and requiring great imagination and ingenuity. MIT in a nutshell.

MIT linguistics professor Noam Chomsky in his office in the Stata Centre. Photograph: Rick Friedman/Corbis

The current president offers two other important clues to MIT's success as a cauldron of innovation. The first is meritocracy. Hockfield is MIT's first female president, which is significant for an institution that since the 1990s has been battling against its own in-built discrimination against women. Women still make up only 21% of the faculty. But the gender balance of its students is almost 50:50, and about 40% of its staff members were born outside the US, underlying how MIT remains a huge magnet for talented individuals around the world. "It's one thing to talk about fostering creativity, but unless you strive for a true meritocracy you are driving away the best people, and what would be the point of that?" Hockfield says.

MIT delights in taking brilliant minds in vastly diverse disciplines and flinging them together. You can see that in its sparkling new David Koch Institute for Integrative Cancer Research, which brings scientists, engineers and clinicians under one roof. Or in its Energy Initiative, which acts as a bridge for MIT's combined firepower across all its five schools, channelling huge resources into the search for a solution to global warming. It works to improve the efficiency of existing energy sources, including nuclear power as it has its own nuclear reactor, a lesser-known fact that MIT prefers not to brag about. It is also forging ahead with alternative energies from solar to wind and geothermal, and has recently developed the use of viruses to synthesise batteries that could prove crucial in the advancement of electric cars.

Before my tour of MIT ends I am given a taste of what this astonishing abundance of riches means in practice. In the space of half an hour I enjoy the company – in the flesh and spacially – of three of the towering figures of the modern age.

I begin by dragging Tim Berners-Lee away from his computer screen to talk to me about how he ended up here. The Briton who invented the world wide web is part of the global brain drain to MIT. He created the web by linking hypertext with the internet in 1989 while he was at Cern in Geneva, but then felt he had no option but to cross the Atlantic. "There were a couple of reasons I had to come – one was because the web spread much faster in America than it did in Europe and the other was because there was no MIT over there."

What is it about MIT that Europe could not offer him?

"It's not just another university, it has this pre-eminent reputation and that in turn sets up a self-fulfilling prophecy: as soon as it becomes seen as the cool place to go for technology, then people will head there as I did. Even though I spend my time with my head buried in the details of web technology, or travelling the world, the nice thing is that when I do walk the corridors I bump into people who are working in other fields that are fascinating, and that keeps me intellectually alive."

Berners-Lee offers to take me to my next appointment, and in so doing makes his point about MIT's self-fulfilling prophecy even more eloquently. We walk along the squiggly corridors of MIT's Stata Centre, which was designed by Frank Gehry. It is a classic Gehry structure, formed from undulating polished steel and tumbling blocks of brushed aluminium that reminds Berners-Lee, he tells me, of the higgledy-piggledy Italian village one of his relatives grew up in. After negotiating a maze of passageways Berners-Lee delivers me at the door of Noam Chomsky. It sums up this wild place: the inventor of the web leads me through the work of a titan of modern architecture to one of the world's foremost linguists and anti-war activists.

Chomsky is in a hurry. On the night of our meeting he will appear on stage alongside the Kronos Quartet at the world premiere of a new piece of music dedicated to him. The composer? Tod Machover, he of the Yo-Yo Ma cello.

I put it to Chomsky that it's a revealing paradox that he, as a leading critic of the US's overweening military might, has been based, since the 1950s, at an institution that was centrally involved in erecting the burgeoning military-industrial complex he so incisively opposes. After all, MIT has long been a leader in military research and development, receiving huge sums in grants from the Pentagon. It was core to America's prosecution of the cold war, developing ever more sophisticated guidance systems for ballistic missiles trained on Moscow.

"What people don't understand is that the role of the Pentagon," Chomsky says, "to a large extent was developing the technology of the future. There were some odd things about it. This building was also one of the centres of the antiwar resistance, and it was right in there, 100% funded by the Pentagon. But they didn't care."

What does that tell us about MIT?

"I was just left alone to my own devices. Other people took days off to run their businesses; I went off as an antiwar activist. But no one ever objected. MIT is a very free and open place."