"Part of the problem is that the number of companies, not countries, companies that are prepared to pay the ransoms as part of the price of doing business and clearly if they didn't pay the ransoms we'd be in a stronger position," Gates told the audience.
Gates said that reducing the number of hijackings and hostage takings will require the combined efforts of the private and public sector and will necessitate the both military and diplomatic efforts.
"We can put a lot in jail and we can kill a lot but there will still be more," Gates said. "Until we can do something to provide some kind of stability on land and some prospects for these people it's going to be a tough problem."
At the heart of the issue, is that the people living in many Somali villages are "unspeakably poor," according to Gates. This makes piracy one of the only attractive options for young men who lack prospects.
In the short term, Gates said he was considering partnering with local Somali governments to try to curb piracy and to try to find neighboring countries to partner with – something that he acknowledged would be difficult as many countries in close proximity to the African nation have weak governments. He described Somalia's central government as being unstable.
Gates said that he was confident that the United States could "at least make it a lot more dangerous and a lot tougher for these pirates and then address some of the longer term problems."
This morning's talk was given as part of Gates' four-day tour of the military's war colleges.