The individuals themselves do not become smarter, but a group is capable of making better decisions than any one individual if they cooperate effectively.
[Becoming smarter] and [making better decisions] are two different things. They don't exactly relate to each other in your statement. Individuals can and do become smarter. Groups can likewise remain in a state of intellectual stagnation. The lower classes of industrial societies are an example of this.

I am not refuting that groups may be superior decision makers than individuals.. But everything is situational. You can have an exceptionally "gifted" individual in the face of an incompetent group of people, or the reverse. Situational.

Groups will at least accomplish large projects faster. More hands (or brains) for more work. The quality of the thought going into it however is a different matter.