President Michael D Higgins has said universities must drive social and intellectual development, instead of focusing solely on economic requirements.
President Higgins was speaking at the annual conference of the European Universities Association, which is being held at NUI, Galway.
Delegates from universities in almost 50 countries are attending the three-day event.
In a 40-minute address, he said scholarship was under threat across Europe, due to a focus on producing graduates solely for economic purposes.
The president said universities had a duty to safeguard and develop an "intellectual infrastructure" for future generations. They should not be simply centres of production for the economic system.
He told delegates that a diminished capacity for discourse had ushered in a new form of aggression. He said that universities had to meet the challenge of responding to this.
While higher education had moved from the periphery to the centre of government agendas in Europe, he said universities were now viewed as foundations of new knowledge in the context of existing trade partnerships.
President Higgins described this as a reductive view, which had brought universities to a point where there was an intellectual crisis. The president questioned an approach where short-term concerns prevailed over long-term developmental objectives.
He said it was wrong to view universities as just place where people were prepared for specific roles in the labour market as this compromised creativity and analytical thinking.
Mr Higgins said that future workplaces would need graduates who were creative thinkers, able to bring different ideas to deal with complex matters.
In this regard, he made repeated references to the importance of the humanities in academic institutions, especially given the role they play in assisting and developing independent thought.
President Higgins said any move to relegate this aspect in universities would be a betrayal of the purpose of education.
He also told the conference that the recent economic crisis was partly caused by a failure by citizens and institutions to question and scrutinise the "insatiable consumption to which they were invited to aspire".
Touching on one of the themes of the conference, President Higgins said there was tremendous potential to extend access to education and to liberate learning as a result of technological advancements. However, he cautioned against losing sight of the true meaning and benefits that were associated with universities.
He said it was vital that students were not disengaged from the true experience of education. This involved learning from those who are passionate about their subject, face to face collaboration and engaging in debate and discussion.
And he said students needed to travel "into the false avenues as well as the fruitful ones" in order to have a rich and fulfilling educational experience.
His speech was greeted with a protracted standing ovation by the 400 or so delegates present. NUI Galway President James Browne described it as a "tour de force" and commended the sentiments expressed by the President.