In the Megacorp RPG System, competencies replace traditional levels or classes. In this system, competencies represent an actionable skill that players can perform and are represented by a keyword (e.g.: #drivingcar, #cooking, or #shooting) and a competency value (e.g.: "3") which is used a modifier when actions are taken concerning that competency. A player can have any number of competencies. New competencies are gained simply by engaging in an unfamiliar action. All competencies are improved only when they are used. The traits alongside the improvement of competencies comprise all of a character’s development, which is done primarily through Challenges.
Driving a car for the first time: imagine this, we are not talking about driving a car without adult supervision for the first time, but literally the first time a person would ever have sat on the inside of a car, in the driver’s seat, with no idea of what a steering wheel or a brake pedal is. This would mean a competency of zero. In many other games, this could be described as attempting a skill 'untrained' but our modern take of this is that, really, there’s no such thing as being completely untrained. In the example of driving a car for the first time, the would-be driver would already know what headlights are from watching TV shows as a child and probably have observed his parents driving, so at least he/she knows that one of the pedals makes the car "go". However, this might not be true for an incarnate born in the middle of the Grushen woods to hardcore Feral parents with no idea of what a car is. Therefore some guidelines are needed for the starting point of competencies awarded to a character. And this is both the job of the player and the GM. The player could argue that the initial starting value could be 0 or perhaps 1 given the background of his/her character, and the GM would decide if it is so. Character Templates can be used to help with this, or this can be moderated or homebrewed by the GM.
All experience is represented by gaining competency value. And no, we are not using XP (experience points). This is dated. Each skill can be leveled up by engaging in challenges that are harder than your current competency score. If a challenge was too simple, logically an individual would not really learn from the experience.
Specializing a Competency
Sometimes competencies can be specialized, such as how #driving is generic but can be applied to #drivingcar and #drivingbus, because the player is training on a particular vehicle. Rather than list every single new skill learned as a new standalone competency, GM/storytellers can use this optional rule to create a hierarchy of competencies through specialization.
As a general rule, the GM should decide if a situation allows for a player to specialize a competency because overusing (abusing) this mechanic might create unnecessary complexity for the playgroup. Specializing a competency simply means that the player is attempting to drill down into a very defined skill set. An aspiring mountain climber would be good at climbing but would be even better with climbing mountains, for instance.
Mechanics of Specializing
Specialization is simply nesting a new, more specific competency inside another parent competency. When a competency is specialized and a player improves the specialized instance, a point is added to all parent skills and the specialization too. For instance, Raphael knows how to cook (competency #cooking ) but he now attempts to bake a cake. Since baking is a subskill of cooking by common sense, the GM allows this. Raphael would gain a sub-competency of #cooking named "#baking" with a value of 0 (totally untrained) Raphael makes a "learning by failure" outcome from his challenge (see below) and improves his #baking competency value from zero to 1. This also improves his root #cooking skill by 1, making it advance to a value of 4.
Subsequently, when Raphael attempts to cook a regular dish, that does not involve baking, he applies his #cooking parent skill which is now 4, however whenever Raphael bakes, he also adds the specialized competency value of his #baking skill. Meaning that he will get #cooking  + #baking  = 5 as his final competency modifier. Basically, players can request for specialization, GM to approve. Then if a specialization is improved, its root/associated parent competency is also improved.