A couple thoughts:
1) technological progress would be, if anything, slower than real-Earth if a large portion of the intelligent, educated minds studied magic instead of science, technology, or even business, just by diversion of resources;
2) when learning magic yields obvious and (at least somewhat) reliable results, there's even less reason to study technology or business or government - a little study and practice (months or years, depending on your magic system) and you can Magic-Missile an opponent, or Fireball an entire company: much more potent (or at least immediate) than organizing a city or discovering new fertilizers or hammeirng together a slow, clumsy catapult.
3) in most fantasy realms, magic is a process of ritual learning and execution - certain words and gestures, and typically objects, must be combined in specific ways to produce results. This is not a process which encourages innovation and experimentation; it rewards ritualism and rote learning.
4)fantasy worlds typically have monsters, which are far more destructive than any animal which ever lived (and which deliberately go about destruction for its own sake, rather than simply trying to survive and thrive). Either a greater portion of resources must be spent beating back the fantasy wilderness, or civilization itself is ravaged.
5) the stereotypical fantasy world is actually anti-progress: that is, the magics wielded in the Olde Days were much more powerful than those of the current time. Mastery of magic, in this motif, depends not on new discovery or invention, but digging into the past to learn how the Old Masters did things. Not just 'bigger is better' but 'older is better.'
6) the existence of long-lived sentients has already been brought up: imagine, if you will, an 'old boys' network' that has had the exact same members for not just years or decades, but centuries! Even with the best intentions, there would be a very strong tendency to maintain the status quo - for reasons which are good, bad, and in between.
