It's rarely beneficial for a child to have a label attached to him, whether it's one that places undue pressure on him ("gifted," for instance), or one that excuses unsociable behavior ("Oh, he's just shy"). The fact is, he may not even think of himself as shy. But say it often enough, and he'll come to believe it. What's more, your child may not see his shyness as an obstacle. But if you talk about it as if it is, he may come to see it as some sort of personality defect. Consider saying, "It takes him a little while to get comfortable in a new situation," instead of labeling him as shy.
If your child has already been labeled shy, try altering that self-image by letting him overhear something positive. When he's in earshot, discuss how friendly he has become, or make a fuss over some effort he made to be social. It's equally important to encourage relatives, family friends, and teachers to avoid labeling.
Shyness should be a bump in the road, not a roadblock. With some anguish and a certain number of false steps, even very shy children can learn to forge relationships and cope with being in the occasional spotlight. They may have fewer friends than other kids, but those friendships will be just as close. If, however, your grade-schooler is so shy that he begins to avoid all interactions, or if you are concerned that your child's shyness is undermining his ability to function, talk to your child's school counselor or pediatrician, who may suggest a developmental evaluation.