Lexi was like that when I got her and she was ony 9 weeks old. With her it was a temperament issue. It took time and patience and tons...I mean tons of socializing. I took that girl everywhere. Made sure she was around kids, noises, crowds...you get the picture. But...you have to do it one step at a time.
The first thing we had to over come was her fear of passing cars. Once she was over the fear, she started jumping and barking at every car. That required making her sit and look at me, reward for not jumping and barking.
Lexi was afraid every time there was something new. A shopping cart, a road cone. Each time I talked to her calmly and careful let her get as close as she was comfortable and finally sniff. They will look to you to see how you react. If you're not nervous or scared it helps them over come their issues.
Anyway...cut to the chase. She is 4 years old now. She has her CGC, CD and 4 rally titles. She is a TDI certified therapy dog. She has worked at America's Family Pet Expo in Orange Co. CA (very busy place). She loves people, OK around other dogs and can fall soundly asleep in her crate at obedience trials. She even eventualy over came her fear of skateboards...that was the last fear and I never thought she was going to handle that one.
Her latest love is agility. If you saw her and how happy and confident she is today, you'd never guess she was a fearful pup.
Bottom line PATIENCE!!! Good luck!!