A survey by Ball State University gave Tennessee's manufacturing sector a 'B' overall, a grade it shares with nearby Alabama.
Georgia, however, was given a 'D+.'
The survey looked at a number of factors, including how diversified a state's industries are, whether the manufacturing sector competes internationally and how prepared high school graduates are to enter the work force.
Michael Hicks, a graduate of the University of Tennessee and director of the center for business and economic research at Ball State, said that Tennessee "shares a problem that much of the South has."
The problem, long identified by educators, politicians and business leaders, is the quality of the schools and the state's comparatively low rate of high school and college graduation.
"It's hard to make the argument that Tennessee is abundantly blessed with high-quality K-12 education," Hicks said.
In 2008, the most recent year for which figures are available, 17 percent of Tennessee adults lacked a high school diploma, compared with 15 percent of the U.S. population.
Only 16 percent of Tennessee adults had at least a bachelor's degree, compared with the U.S. average of 20.3 percent, according to the U.S. Census Bureau.
At present, that hasn't stopped employers like Volks-wagen, Amazon and Wacker Chemical from growing operations in the region. But as the national economy heals itself, Tennessee could lose its current labor advantage if it doesn't take education more seriously, Hicks said.
"As soon as labor markets get full, and once there is no longer slack in labor markets, then human capital is going to matter," Hicks said. "Georgia, Alabama and Tennessee are going to have a far more unpleasant time finding businesses willing to relocate to places where there is not an abundance of skilled workers."
Still, the massive carpet and flooring industries have chosen to locate many of their plants in the region, where workers may not be educated but still are skilled.
"I think we're in a pretty good position on our sites because the work ethic and productivity," said Randy Powell, executive vice president of operations at Chattanooga-based Propex. "That's not something you can always measure."
Robert Phillips, executive director for the Chattanooga Technology Council, said education shortfall is a nationwide concern.
"On the education side of it, there's not any surprise that American students are not competitive on the higher end of the scale when you compare them to the rest of the world," Phillips said.
Aside from education, the Ball State report gave Tennessee an 'A' for its ability to import and export goods on a global scale, and a 'B' for having a diversified manufacturing base.
Georgia's lower manufacturing grade stemmed from an 'F' in productivity and innovation and a 'D+' in work force education. However, Georgia did well in logistics, scoring a 'B+' in both its transportation infrastructure and in its diverse blend of industry.
Contact Ellis Smith at email@example.com or 423-757-6315.