Consider "The Red Queen" by Ridley book. It's premise is that evolution constantly improves a species, but since other species also are improving, the species runs and runs but stays in the same place.

It's the same thing in business. One has to relentlessly decrease the cost of doing business, because your competitors are doing it as well. You run and run and stay in the same place.

I haven't read the cited article, but the professor would need to show that industry profit margins are increasing to make his point. I haven't seen any evidence that margins increased in general.